What documents you need to work in a country, where you have to pay your tax and social security and how you actually pay that tax and social security are the main questions we face in the international contracting sector.
You may well know the answer to these questions in your home country but automatically applying them in another country can be a dangerous game to play and can lead to serious consequences, for both yourself and the client where you are providing your services..
Even the supposedly simple task of working out in which country you have to pay your tax is not that simple. For example, in relation to contracts in many middle east countries such as the UAE, you will often see the term “tax free!” used in job adverts.
The UAE has no tax liability therefore if I go to the UAE I will not have to pay tax! Unfortunately this in most cases is wrong. Although you will not have any tax to pay locally unless you have become a ‘non tax resident’ in your home country (something which is notoriously difficult to do in most countries) the fact that you do not have to pay tax in the UAE does not mean you will not have to pay tax on the funds earned in the UAE back home. This is without additional local charges or taxes you may not know about.This is not an extreme example either, but rather a common trap that many contractors and expatriates fall into when working in so called ‘tax free’ countries.
Even within the EU the rules are not always straight forward. For example, in the UK we have IR35 to be considered, in Germany there is a church tax, in Belgium there is a municipal tax in addition to income tax and in Switzerland there may be labour leasing issues.
If you are working in one or more countries, trying to follow the many and varied immigration and tax laws fully and compliantly can be complex as well as time consuming. That can result in unnecessary time being spent away from working on your contract, something we know you will not want to do any more than is necessary.
