Accountancy Publishes Akin Gump Article on COVID-19 Travel Restrictions’ Impact on Tax Residence
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Accountancy has published the article “COVID-19: travel restrictions impact tax residence,” written by Akin Gump tax partner Stuart Sinclair and counsel Serena Lee. The article, first distributed as an Akin Gump client alert, looks at some of the issues corporate directors should consider when making decisions about board meetings in order “to minimize the risk of unintentionally creating a taxable presence outside a company’s jurisdiction of tax residence” during the pandemic.
Sinclair and Lee outline how a company’s taxable presence is defined and advise that businesses “take steps now to consider (and limit) the impact of remote working and coronavirus-centric measures on their business and tax structures.” They also note that, “the factors relevant to a company’s tax residency status will often be tested over a period of time, rather than isolated, one-off events.” As a result, it may be wise to take certain steps to improve one’s position.
The article suggests that companies may wish to check “their constitutional documents to ensure that any decisions made at the relevant meetings are validly made.” It concludes by adding that fund managers should “monitor how jurisdictions like the Cayman Islands, the Channel Islands and others will operate their new economic substance rules during this period.”
To read the original client alert in its entirety, please click here.
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