Thank you to Lona Alia and SafetyWing for featuring John and The Work From Anywhere Team in their The Borderless Company series. Below is a high level summary of some of the issues discussed. Check out the chat to discover more.
Remote Work Tax
This episode ‘How to address taxes, visas, and benefits for your borderless employees’ was right up our street…tax, tax and more tax!
The Four Options for Managing International Tax Compliance of Remote Workers
- Set up a local entity / branch
- Hire via an Employer of Record
- Hire as a contractor
- Make use of digital nomad visas
Managing Permanent Establishment Risks of Remote Work
Plenty of questions coming in on this subject. Because the rules of creating PE differ so widely from country to country, companies need to take extra care in assessing whether the presence of remote workers have created Permanent Establishment. Do you have senior managers or sales generating roles working remotely overseas? Where has your IP been generated? These factors can have a huge impact on whether your employees have created PE in the destination country, potentially creating a significant corporation tax obligation at the same time.
Do Employers of Record cover Corporation Tax?
While EOR’s cover personal income tax, social security obligations and local employment rights, the corporation tax implications of hiring remotely are definitely a blind spot of theirs. To avoid the risk of a tax bill that could run into the hundreds of thousands, if not millions, make sure to check whether you will create Permanent Establishment through your remote hire, before you make the decision to hire via an EOR.
How Digital Nomad Visas can be used to Mitigate Remote Work Tax Risks
DNV’s can be very useful from a personal taxation point of view with many countries offering visas to attract remote workers without having to pay income tax locally on foreign sourced income. But this often doesn’t include CGT. And PE can still be created.
Please get in touch here if you are interested in interviewing either of the Work From Anywhere Team Founders for some thought leadership in the remote work space.