Description:
I’m planning to work remotely from a different country than my employer (or already do). What are the main tax, payroll, and compliance issues I should be aware of from both the employee and employer perspectives? In particular, I’m looking for practical, career-focused guidance on:
– How my tax residency is determined and when I might owe income tax in the country where I live versus the employer’s country.
– Employer withholding and payroll obligations: can they keep paying me from their home payroll, or do they need to register locally/withhold local taxes and social security?
– Social security/benefits: when do I continue under the employer’s system vs. become liable for local contributions (and how that affects pension/health benefits).
– Double taxation treaties and how to claim relief, plus common documentation needed (residency certificates, tax filings, etc.).
– Classification risk: employee vs contractor β how it changes taxes and protections, and what to negotiate if my employer prefers one model.
– Permanent establishment risk for the employer and why some companies refuse remote work from certain countries.
– Practical steps I should take (ask employer for X, consult Y, keep Z records) and red flags that suggest the employer isn’t handling compliance properly.
Any concrete examples, common pitfalls, or negotiation tips (e.g., requesting tax equalization, PEO/Employer-of-Record solutions, or payroll alternatives) would be especially helpful.
4 Answers
tax residency usually where you live; insist on residency certificate, EoR/payroll plan, and a local tax adviser...
Remote work across borders triggers three big things: tax residency, withholding/SS rules, and employer PE risk. Tax residency usually follows days lived or centre of vital interests - so you might owe tax where you live, even if paid by the employerβs country. Employers sometimes must register payroll locally or use a PEO/EOR; otherwise you (or they) risk local withholding and penalties. Social security depends on treaties/A1 certificates or totalization agreements - you might stay on employerβs system for a time, or switch to local contributions.
Keep residency certificates, day logs, contracts, pay slips and tax returns. Watch red flags: cash pay, refusal to register, or pressuring contractor status. Negotiate tax equalization, gross-up, or employer-paid PEO and get local tax advice.
check tax residency, withholding, social security, classification and PE risk. get residency certificate, ask for local payroll or EOR, keep pay records, consult specialist.
Think beyond income tax. Visa and immigration rules often forbid working remotely for a foreign firm while on a tourist visa, which can create criminal or deportation risk and force the employer to refuse certain countries. Equity and option taxation is frequently overlooked; moving countries can trigger tax on vesting or create additional withholding obligations. If youβre treated as a contractor, VAT or GST rules may apply and your invoices could require reverse charge treatment. Ask for a written indemnity for unpaid local payroll taxes and any fines, and negotiate a gross up for unexpected liabilities. Request clarity on who handles termination, severance and statutory benefits, and insist on a short compliance review from a local tax lawyer before you move.
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