Jan Alaska

My son has had a job proposal thrown at him, the company he is working for now are asking him to work remotely for the US side of the company (he's currently employed by this company in Eire)

His question is would he need a visa to work for the US side ? and
Where would he pay taxes ?

His original question ....
[Okay, I've tried searching but I'm so confused. Do I need a greencard/visa/h1b to be able to work for a US company without moving to the US? (eg, internets baby). And where would I end up paying taxes?

Everything I can find is either for US citizens working abroad, or american companies importing indians.]

unique_boy

I am not an expert but that does not seem legitimate. He needs a visa to enter the US so options are the Visa Waiver Program for up to 3 months but that is a holiday visa. As he is working I would assume he would need a visa and to enter on a holiday visa and working could end up ruining his ability to enter the US on future dates. I

MsElui

if hes not physically going to be in the US he doesnt need a visa to work remotely for them. they would need to pay him locally though as i dont know how hed get around the lack of ssn otherwise.

Shaun O

Hi,

To clarify (Jan Jr here), I wouldn't be moving there (or physically entering at all). But I can't figure out if I'd be taxed twice, etc.

And to be fair to the employer - I'm not being asked to make this move. I'm trying to relocate within the EU, and my current position isn't able to work remotely. But our US counterpart is, and have expressed interest in keeping me. So it's an attractive offer rather than a big request.

rpjs

If they can't pay you through the EU end of the operation, I'd imagine they'd probably end up paying you as a contractor with you having to deal with Irish (or wherever in the EU you relocate to) taxes and National Insurance/Social Security contributions equivalent. I don't see why they couldn't do that without having to withhold US taxes.

The US has tax treaties with a wide range of other developed countries, so chances are there would be one with your new country of residence and that would mean that if you were taxed in the US, you could use any tax paid in your country of residence as a credit against US tax. Unless you're planning to move to somewhere with low/flat income tax like Estonia, they'd probably exceed any US tax levied.

Pulaski

Others have covered most of your questions, but it would be very difficult to be on the US payroll when you work overseas. You would either need to become a contractor, with pay "grossed up" for payroll taxes the company is saving, OR they would need to contract with a payroll service, perhaps a local medium sized Chartered Accountant firm, to handle your pay and taxes.

rpjs

+1 In the UK contractors, especially in IT, often engage a "shell" company to deal with tax and NI issues; the company you actually do work for pays the shell company the gross rate with no taxes deducted and the shell company (your legal employer) takes a small cut of the payment, does the tax and NI withholding for you and pays you the balance.

Shaun O

Thanks guys - gives me a much better idea of what path lays this way (past my initial "er, that sounds complicated ..")

The blessing & the curse is that it's not a small outfit (something like 160,000 employees in 190 countries). On the plus side it means the HR machine should have some idea how this works. On the downside it means eternal catfights over what comes out of who's budget.

Cheers.

Sheepdip

I did exactly that for quite a few years. Money came from the US but taxes, NI etc. were paid to HMRC. PM me if you want any details.

Steve_

This is a pretty common thing, if they have multiple employees they set up a payroll in the country where you are and you're paid as if you work for a local employer. If you're just a one-off, they usually won't do it, so you either set up your own company or register as self-employed and invoice them. And you do all the tax withholding and paperwork yourself.

You have to be careful because payroll taxes usually fall in part on the employer, so say you are paid $100,000 a year and the employee's part of payroll taxes on that are 7.65% and the employer's part is 7.65%, then the total cost to the employer is $107,650. If you contract, you've got to pay both halves, so you are $7,650 worse off if you only invoice $100,000. So it's important to take that into account when working out how much to invoice them.

Not sure how VAT works in Ireland but typically exports (which includes services provided to foreign companies) are zero-rated unless there is a VAT treaty, which there won't be with the US because there is no VAT there. So you can claim input tax credits, but you don't collect any VAT, i.e. you just claim the VAT back on anything you buy to fulfill the contract on your VAT return.

JAJ

In general, being an employee cross-border doesn't work. Mainly due to lack of transferability of benefits, and potential double exposure to social security taxes.

The only way it could work (as an employee) is that if you remained an employee of the Irish entity and then they charged the costs internally back to the U.S. entity using your services. But if you then leave Ireland to live in another EU state, you'd then have the same problem all over again.

The other option is to work as a self-employed consultant/contractor. It's still complicated. Issues to consider include, but not limited to:

1. You'd need a contract agreement with the specific U.S. company that you would be working for;
2. As a consultant you would not get vacation, healthcare or other benefits, so you would need to ensure your hourly rate reflected that.
3. U.S. tax liability and withholding (since you're not a U.S. citizen/resident) depends on whether the services are performed in the United States. If not, and in your case they should not be, you may be able to avoid having any U.S. tax withheld and completing U.S. tax returns, etc.
4. You would be liable to pay social security tax where you live (Pay Related Social Insurance, if in Ireland).
5. As long as you set your contract up correctly (for example, having the right to work for other clients), you would normally be considered self-employed where you live. But you would have to manage that risk.

If this is a large U.S. company they should already have experience of dealing with non-U.S. consultants, both providing services inside, and outside, the United States.

Some consultants incorporate, in other words provide their services through a personally owned corporation and then pay themselves salary and/or dividends. However, this raises a whole host of other tax issues, since many jurisdictions have special rules in place to prevent tax deferral/avoidance this way. And if you are planning to move countries within the EU, you don't normally want to add a cross-border complication.