Do you have staff working or wanting to work overseas? If so, make sure you stay on the right side of the tax rules.
Employees working abroad may become tax residents in any country where they live and work for more than a certain number of days a year. So, you need to think about the tax ramifications before they move. In fact, you and your employees may become liable to pay income tax to multiple authorities if they live and work in more than one country. However, if double taxation agreements exist between the relevant countries, you and your employees will only be taxed in one jurisdiction. Your payroll team needs to be aware of this to ensure tax is paid correctly to the relevant authorities.
Another risk to watch out for is whether having staff abroad creates a permanent establishment (PE) for the business. Having a PE means you must pay corporation tax on revenue generated there. A PE presence is triggered when you conduct revenue-generating activities. So you will need to assess the type of work employees are doing abroad, like concluding sales contracts.
If you’re worried about this, please get in touch. We also work with Omnipresent, who offer a range of global employment services to help companies with their remote hiring strategy.
