Who the withholding tax procedure is for
The procedure matters for companies that make payments to foreign entities on a regular basis. Without clear rules, errors in the collection, the documentation or the settlement are easy to make. Due diligence is a statutory duty of the paying agent, and it is assessed against the nature and the scale of the business conducted. A formal procedure that is actually in use makes it easier to show that the duty was performed, should a tax authority question the collection. The duty has to be met before the payment is made, which is why the procedure is worth putting in place in good time.
What we pay attention to during the roll-out
The procedure has to follow the real flow of payments within the organisation and remain clear to the employees responsible for the collection. We account for the various types of payments, such as interest, dividends, fees for intangible services and royalties, and for the exemptions available where the law provides for them. The procedure also sets out who is responsible for each step, how the documents are kept, and what the escalation path is where doubts arise as to whether the collection is correct.
Price and scope
The fee starts from EUR 2300 net and covers, as an example, one company and one procedure covering the typical cross-border payments. A wider variety of payment types, a larger number of foreign recipients or integration with the IT systems raises the price, and we confirm the fee before the work starts.