Should i pay corporation income tax in UK, when having business in British Virgin Island ?

Hello Hope you are doing great. I really need some help I, am Amazon seller, and I sell my products on UK marketplace. I, am both doing FBM and FBA. I have my products stored in Amazon warehouse in UK, and some say I don,t have a PE in UK, because they are stored in amazon warehouse, and it is not my own warehouse, and some say I do have a PE in UK I also have a prep-center in UK. PS the prep-center is for repacking for products, it is not my prep-center, there are people who handle everyone, s products. I have never lived in UK before, I just buy and sell products in UK I Live in British Virgin Island, and I have my company registrated in British Virgin Island I don,t have any company registration in UK. My products are bought from Suppliers in UK and will be sold in UK. Can I get my Vat registration in UK with my British Virgin Island company registration ? And also do I need too pay any corporate tax too UK, in my situation ? There is a double tax treaty between UK and British Virgin Island I have contacted many TAX CPA, s in UK and professional tax consultants and even expat tax consultants. But there opinions are very different from each other. So i cannot follow that advice unfortunately, because I don, t know or it is lawful, and this why I ask here from HMRC. I, am looking forward too here from you, and too hear your advice, off how I should handle this. Many thanks. Sincerly 

Name removed admin 

Hi Leslie2023,
As you are trading in the UK, you should register for Corporation tax and VAT in the UK, and submit tax returns on your UK activities.
Goods stored in Amazon warehouses in the UK would not constitute a permanent establishment.
Thank you, 

Hello. Thank you so much for your reply. It is greatly appreciate it. I would like too ask, does this also count if i have bahrain company registration. PS. i ask this because i was serious considering too change my BVI company registration too a Bahrain company registration. and i would like too live permanently in bahrain. This is my last question. Also i would like too ask you, can you show me where it stands this you wrote too me : Like can you show me a article off it. As you are trading in the UK, you should register for Corporation tax and VAT in the UK, and submit tax returns on your UK activities. Thanks in advance,

You wrote i need too register for corporation tax and VAT in UK, and submit tax returns on your UK. Does this mean i need too corporate tax in UK in my situation as a non resisdent ?

Also i would like too know if i register as a soleproprieter in bahrain or BVI , but trade in UK, as written in my case. Do i then need too pay corporate taxes too UK. I,am thankful for you reply, but it is a bit short reply, and i would just get confirmed if this counts for every place i want too live in the furture, besides the tax treaty there is between the countries ?

This is subject to possible double taxation relief And also when i trade in UK with selling my amazon products in UK but living in a tax free country, can i then be subject too double taxation exempt, if UK as a DTT with that country, example Bahrain, and BVI ? Like that i only have too pay tax too that country i live in which is in this case 0 %, and not paying corporate tax too UK ? this is a very important question for me too get answer on.

Hello HMRC Would you please answer my questions ? Many thanks

Hi
If the company is trading in the UK it will fall within the UK domestic charging provisions and would need to register for tax in the UK.  
This applies no matter where the company is incorporated.  
However, there is a distinction between trading in the UK and trading with the UK.
Guidance is available on our website atNon-residents trading in the UK.  
You will note that trading by non-residents with the UK as opposed to in the UK, does not bring the non-resident within the UK domestic charging provisions.  
However, whether the company is trading in the UK is a matter of fact for you and your tax consultants to determine.  
If you determine the company is not trading in the UK, it would not need to register for Corporation Tax.  
If you became a sole proprietor undertaking the activities described, the same considerations would apply to the trading position.  
However, there is no PE test for Income Tax.
Double Taxation Relief (DTR) is available to prevent the same income being taxed twice in two different tax jurisdictions.  
If the company is trading in the UK, the company’s state of residence (Bahrain) would be required to give DTR under Article 21 of the UK/Bahrain Double Taxation Treaty.  
The treaty is available at Bahrain: tax treaties.  
However, if Bahrain does not tax the income there will be no double taxation only single taxation in the UK which is permitted under the terms of the UK/Bahrain Double Taxation Treaty.  
Wherever you choose to reside, you will need to consult the appropriate Double Taxation Treaty to determine the correct tax treatment of the income.
For guidance on the VAT implications please contact our VAT department directly VAT: general enquiries
 

Hello HMRC. Thank you for your reply. It is much appreciatet. you write this : If you determine the company is not trading in the UK, it would not need to register for Corporation Tax. I don,t have a PE in UK i don,t own a Warehouse i UK the products are stocked in Amazon warehouse. I also don,t have a own brand in UK but you also write this : However, if Bahrain does not tax the income there will be no double taxation only single taxation in the UK which is permitted under the terms of the UK/Bahrain Double Taxation Treaty. Bahrain does not tax income so basicly i need too pay tax too UK in my situation. Am i correct ? Hope too hear from you soon. Many thanks

Hi lolly pop,
In relation to what consitutes a 'permanaent establishment' I would refer you to - 'INTM264050 - Non residents trading in the UK;domestice lawpermanent establishment/branch or agency.' - available via GOV.UK.
INTM264050 - Non-residents trading in the UK: domestic law permanent establishment/branch or agency
As previously stated, you will need to consult the appropriate Double Taxation Treaty to determine the correct tax treatment of the income.
You may wish to consider employing the services of accountant, where both that person and yourself, will be possession of the full facts.
Thank you. 

Hello The issues is have had contacted many accountants and consultants in UK but some say i do need too pay tax in UK, and some say i don,t have too pay tax in UK in my situation. Thank you for send link me the link i could just read this There is no permanent establishment in the UK if the activities here, whether through a fixed place of business or an agent, in relation to the business as a whole, are preparatory or auxiliary in character. The statutory definition gives some examples of activities that are preparatory or auxiliary as follows: The use of facilities for the purpose of storage, display or delivery of goods or merchandise belonging to the company, The maintenance of a stock of goods or merchandise belonging to the company for the purpose of storage, display or delivery, The maintenance of a stock of goods or merchandise belonging to the company for the purpose of processing by another person, Purchasing goods or merchandising, or collecting information, for the company. Will this say as a amazon seller trading in UK as a non resisdent living in a country where no tax have too be payed. That i don,t have too pay ax in UK in my situation. ? many thanks looking forward too hear from you soon

i also believe i need your answer and not a answer from a advisor i UK, because 50 % say yes i do need too ay tax in and 50 % i don,t need too pay tax in UK. That would be waste off money as they cost inbetween 500 - 2.000 GBP So i need your advice. So my questions are When i live in a tax free country but trade in UK, do i then need too pay tax too UK or not as a non resisdent ? please read my first message then you can read off what i,am doing. i,am a amazon seller i have stored my products in UK Amazon warehouse i don,t have any brand to i then have a PE in UK ? Unfortunately you are writing different answers so can,t figure out or i need too pay tax too UK or not in my situation, if i live in Bahrain or BVI. ?

If UK tax consultants give me wrong advice, then i can get huge fines later, that is why i think HMRC should be able too tell me what i need too do in my situation, the problem is not in BVI or Bahrain, they are tax free the problem is trade in UK while living in a tax free country. the only advice i should follow is from HMRC, tax consultants have many different opinions i cannot use it

Whether considering income tax or corporation tax, trading in the UK is a prerequisite to the existence of a UK charge: ITTOIA05/S6(2) The profits of a trade, profession, or vocation carried on in the UK by a non-resident are chargeable to Income Tax. CTA09/S5(2) - A company not resident in the UK is within the charge to corporation tax only if it carries on a trade in the UK through a permanent establishment in the UK. I don,t believe that have a PE in UK The domestic law definition goes on to give some non-exhaustive examples of places of business that are ‘fixed places of business’ such as: a place of management, a branch, an office, a factory, a workshop, an installation or structure for the exploration of natural resources, a mine, an oil or gas well, a quarry or any other place of extraction of natural resources, a building site or construction or installation project. There is no permanent establishment in the UK if the activities here, whether through a fixed place of business or an agent, in relation to the business as a whole, are preparatory or auxiliary in character. The statutory definition gives some examples of activities that are preparatory or auxiliary as follows: The use of facilities for the purpose of storage, display or delivery of goods or merchandise belonging to the company, The maintenance of a stock of goods or merchandise belonging to the company for the purpose of storage, display or delivery, The maintenance of a stock of goods or merchandise belonging to the company for the purpose of processing by another person, Purchasing goods or merchandising, or collecting information, for the company. i don,t have a office in UK, i don,t have own branch i don,t have own warehouse in UK, and i don,t have a workshop, it is a amazon store, i don,t have a factory, and the place off management is not in UK, only the products will be repacked in UK, but the store will be handlet in bangadesh i sell my products in UK on amazon and use amazon warehouse in UK. and i have some suppliers in UK that,s it. so should I pay coprorate tax in UK in my situation. Many thanks

Hi,
Please be aware that this forum is not a medium to obtain tax advice from HMRC.
Companies are required to self-assess their tax affairs, and HMRC guidance is available to aid with decision-making.
This includes making judgments about whether a company is within the charge to UK tax. 
There is HMRC guidance relevant to your query that will help you decide whether the company is liable to UK tax:
HMRC guidance relating to UK permanent establishments can be found at:
INTM266120 - Non-residents trading in the UK: Treaty permanent establishment
HMRC guidance on whether UK activities are considered auxiliary or preparatory in nature is at:
INTM264460 - Non-residents trading in the UK: permanent establishment: domestic and treaty law: fixed place of business: activities specifically excluded within the definition of permanent establishment
HMRC guidance on whether there is a charge to UK tax under domestic law is at:
INTM262300 - Non-residents trading in the UK: Is there a charge under domestic legislation: Domestic charging provisions
If you determine that the company has a UK permanent establishment, you will need to register your company with Companies House:
Register as an overseas company
If you need further information or advice in relation to this matter, you will need to contact a financial adviser, such as an accountant. 
Thank you.
 

hello Thank you i understand. I want too ask you, i did contact a financial tax consultant, as you requested. he says i don,t have too pay for UK corporation tax in my situation. What will happen if HMRC decide it that i do need too pay corporation tax too UK, in my situation and my consultant says i don,t need too, ? Like what if get fines from HMRC ? some consultants say i do need too pay tax too UK and some say not ? What should i choose then ? Hope too hear from you ASAP

I Would also like too ask can i make a contract with HMRC and my tax consultant that this what my tax consultants says HMRC will allow / accept, so i,am sure the tax info is correct ?

In the fist message from HMRC Admin 25 he told me : As you are trading in the UK, you should register for Corporation tax and VAT in the UK, and submit tax returns on your UK activities. Goods stored in Amazon warehouses in the UK would not constitute a permanent establishment. Thank you, But as i don,t have a permanent establishment in UK as ADMIN 25 wrote too me, how can it then be that i still need too pay corporate TAX too UK as a non resisdent when trading in UK ? is this correct what HMRC ADMIN 25 wrote too me ? hope too hear from you ASAP

Hi lolly pop,
If the company is trading in the UK it will fall within the UK domestic charging provisions and would need to register for tax in the UK.
This applies no matter where the company is incorporated.
However, there is a distinction between trading in the UK and trading with the UK.
Guidance is available on our website here:
INTM262210 - Non-residents trading in the UK: Is there a charge under domestic legislation: Trading in the UK: Introduction
You will note that trading by non-residents with the UK as opposed to in the UK, does not bring the non-resident within the UK domestic charging provisions.
However, whether the company is trading in the UK is a matter of fact for you and your tax consultants to determine.
If you determine the company is not trading in the UK, it would not need to register for Corporation Tax.  
Thank you. 
 

Hi lolly pop
Liability to corporation tax for a non resident company depends on it having any kind of permanent establishment (PE) through which trade is carried out.
While there are exceptions to this they relate to activities like land development and property rental and, based on the information you have provided, do not apply.
 A company is not regarded as having a permanent establishment if, in relation to the business of the company as a whole, the activities carried on are only of a preparatory or auxiliary character.
Including:                                                                                                            
(a)the use of facilities for the purpose of storage, display or delivery of goods or merchandise belonging to the company;
(b)the maintenance of a stock of goods or merchandise belonging to the company for the purpose of storage, display or delivery;
(c)the maintenance of a stock of goods or merchandise belonging to the company for the purpose of processing by another person;
(d)purchasing goods or merchandise, or collecting information, for the company.
 Based on the information you have provided (goods stored in and repacked and sent from an Amazon warehouse) the company does not have a permanent establishment in the UK and does not require to register for UK corporation tax.
It may be liable for Value Added Tax (VAT) and I note that you were previously advised to contact VAT directly here:
VAT: general enquiries
Thank you.