European company trading in the UK - Corporation tax ?

[c hopkin]

I'm a UK agent for a large European company that wants to trade in the UK but does not want to have a UK entity but also wants to have some stock in the UK at a fulfilment centre
Can they operate in this manner ? clearly they would still need to pay corporation tax on profits

The model is as follows - Stock is sent from the European manufacturers in China into a UK fulfilment centre - The European company pay the VAT & duty and then goods are housed in a UK fulfilment centre until they are dispatched to one of the UK customers - When goods are ordered and dispatched - The European company processes invoice from Italy

So question is - how does the EU company manage the corporation tax element if they dont have a uk entity ? Is this possible ?

 

[GriffithAccts]

This would not be considered a permanent establishment for CT tax purposes in the UK. Only for VAT/import duties on stock transferred into the UK. Only the Italian entity in this regard would pay the corporation tax in Italy based on the oversees profits gained from the UK (Italian entity invoicing UK customers). Happy to discuss, please reach out.

 

[apricot]

I understand how this process works for a UK company that keeps stock in the EU, so I assume it would work similarly in reverse. As a UK-based company, I keep stock in EU countries and pay VAT only. VAT is paid to the country where the customer is based. For example, if the product is stored in Germany and shipped to Italy, I pay Italian VAT.

I do not pay any corporate tax for simply holding stock in any EU country.

While UK fulfillment centers would be the experts on this, this is how I believe the process works.