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Posted Thu, 19 Dec 2024 13:49:47 GMT by Tom Jordan
My company is discussing with a potential client about assisting them with some technical training on site in Canada for 4-6 weeks (spread over ~ 3 months). The company is a UK limited company and has UK employees. The contract would be the UK company providing professional services and would invoice the Canadian client once the training is completed. In this scenario, would the Canadian client need to deduct Witholding tax when paying the invoice? I believe the answer is no, due to the double taxation treaty, but I am unsure as the training will be conducted on-site Vs remotely. Any insight would be greatly appreciated.
Posted Thu, 09 Jan 2025 11:45:34 GMT by HMRC Admin 20 Response
Hi,
To avoid being taxed twice on the same income, the UK has double taxation agreements (DTAs) with many countries. These agreements generally allow UK companies to claim relief for foreign taxes paid on overseas profits:-
INTM167000 - UK residents with foreign income or gains: corporation tax
It would be up to the Canadian tax authorities to decide if withholding tax should be deducted from the payment(s) they make to you  
You may need to supply a Certificate of UK Residence (CoR) before the Canadian Company makes the payment, see our published guidance here: 
https://www.gov.uk/hmrc-internal-manuals/international-manual/intm120090
You can apply for a CoR here using form RES1
Apply for a Certificate of Residence
Once received, the certificate can be presented to foreign tax authorities to prove that your company is a UK tax resident and eligible for benefits under double taxation agreements. This is essential when claiming tax reliefs or exemptions from withholding taxes on income received from foreign sources
If Withholding tax is deducted from the payment(s) received, where there is a Double Taxation Agreement with the other country, relief from double taxation can usually be achieved by claiming a credit against the tax due when you file your Company tax return form CT600
Thank you.

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