Is there any way to predict how competent authorities will decide tax treaty issues beforehand?


I have been studying the UK/US double tax treaty and it's explanation in anticipation of the creation of a US subsidiary wholly owned by a small internet-based company in the UK. It seems as though any company incorporated in the US which is managed and controlled from the UK would qualify as a dual-resident corporation, which means that by default most of the benefits of the tax treaty would not be applicable. For obvious reasons it would be desirable to be deemed a resident of only 1 country, as there are benefits in the treaty that would apply in this case.

I know that there is a procedure in cases like this for having the "competent authorities" of the two countries decide how the treaty would apply, which I have looked into on the IRS website. However, I have not been able to find any information about how residency cases such as this tend to be decided. Is it relatively common for companies to be granted the treaty benefits in situations like this?

The other concern is that at least according to the information available here requests must be made only after taxation has occurred. Since how the company will be taxed may affect decisions about incorporation, is there any way to get an idea of how a case would be decided beforehand?

UK Tax International

asked Oct 26 '10 at 04:58
28 points

2 Answers


It may not be very relevant, but in Poland you can send Inland Revenue a letter stating your situation and asking a question. After a small fee Inland Revenue will provide you with their answer that will be binding in the future. So you don't have to worry about some other official deciding differently.

I wonder if such a facility exists in US/UK. You might want to give them a ring and ask if such a thing exists.

answered Oct 26 '10 at 07:42
Jakub Konecki
111 points


That's why there are very expensive lawyers and accountants that you can hire to look into those issues.

answered Oct 26 '10 at 09:32
Alain Raynaud
10,927 points
  • That's sort of what I was expecting to hear, but I figured it was worth a shot. Thanks. – Brian 13 years ago

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