Foreign based business, tax vat law, trade:ecommerce?

Question

Hi

If i have a company setup in another country such as israel, and i live and reside in the uk for example, do uk tax laws apply to me as far as vat and corporation tax laws are concerned, and does that also mean my business account has to be a foreign account or can it be a uk based british bank?

The issue is i have a ecommerce based business, and i dont actually deal with goods i deal with services rather online, and i was born in the uk, but my parents reside in the middle east, and we have a company base over there.

So is it feasable and lawful for me to live here and do business via my foreign based business.

warmest regards

Tovia singer

Answer 1

The end customer is liable for VAT in the County where they live (as all those eBay Auction Winners who suddenly get stung for VAT and Customs when goods are posted from USA / Hong Kong etc. have discovered).

Basically a Company pays Tax in the Country where it is based (so if it's Registered in Israel, the Company pays Israeli Corporation Taxes) == it's actually a bit more complex than that, however that's what Company Accountants get paid for).

You (as an individual) pay Tax in the country where you live (eg UK) = if you receive money from the Company, you pay UK Income Tax (if it's wages) or Investment Tax (on Dividends) on that money.

So yes, of course is OK to do business via a foreign based company so long as you pay your taxes ... (a lot of Companies operating in UK are foreign based for tax reasons).