Once the local entities have been setup, other infrastructure needs to be put in place. In the tax arena, this covers the setup of the foreign country intercompany agreement (ICA). The ICA may be a straight "cost plus"' or a commissionaire agreement or it may be a full buy/sell transfer pricing agreement.

Whatever your situation, Nair has a tried and tested process for resolving the issue. This consists of running through a detailed checklist of questions, drafting the legal document and creating an audit trail to justify the numbers in the final agreement. We do not use ICA document templates as these simply are never comprehensive enough.

Once you start to move from one phase to the next (e.g. R&D to "try it and buy it if you like it"), indirect tax issues arise. For example, if your local entity is operating on a strict cost plus agreement, it cannot import goods. As such, the local entity cannot pay the "VAT" on goods it does not own, imported into the local jurisdiction and, can not recover this "VAT" if paid. If "VAT" is incorrectly recovered, you risk being required years later to refund a massive amount of "VAT" and pay penalties of up to 100%.

Nair has seen and dealt with a wide variety of problems of this nature. Our role is to anticipate these problems and help you avoid incurring them.

Stock options are another area where in a rising market large liabilities can inadvertently build up. Stock option annual returns need to be made in some countries and not in others. In some countries action can be taken to limit or avoid employer's social security on stock option gains which would otherwise be a bottom line hit. The payroll treatment of stock options is also different from one country to another (e.g. Netherlands compared to Germany). A sub-plan for a particular country may also need to be put in place.

Nair deals with such issues each day and will take care of them for you.

You may also send expats abroad. Nair acts generally for head office and not as a personal accountant to local employees to avoid conflicts of interest. However, we have resident expat specialists who can advise on tax equalization issues, dual employment agreements and the 30% ruling in Netherlands to name a few issues. 

The tax group consists of double qualified accountants/tax specialists, as well as VAT and tax specialists.