2 ms·

Contracts are a matter of contract law, but your relationship with the revenue agency is not bound by that contract. I am not a lawyer but I do have some exper

by ska 7y ago

Contracts are a matter of contract law, but your relationship with the revenue agency is not bound by that contract. I am not a lawyer but I do have some experience in this. So, as I understand it if one or both country's agencies decide it is actually an employer/employment relationship they may decide withholding was done/not done in the wrong place, or invalid tax credits etc. were claimed and may assess penalties for that on top of wanting the amounts back. It can also complicate things like VAT collection, etc.

em-bee 7y ago
(i appreciate your response, and i do not want to appear to pick your statement apart for the sake of arguing. if anything it's my ignorance showing in this matter. apologies for that) but doesn't any of what you say imply a treaty between those two countries? this is getting of course country specific, but my company has hired people in other countries before. and the problem is not trying to get around employment law, but rather that i don't see any options to treat that person as an employee. we can not employ anyone unless they have the legal right to work in the country of employment. to be an employee in a US company, i need to have a work visa for the US. i do not see any other option there. for this to work without a visa, there would have to be a category of foreign remote employees. i have never heard about any such thing. in other words, without a treaty between the respective countries, an employer/employee relationship is not legally possible. how would you pay my social security or insurance? without a treaty that defines this, you can't. you have to give me the cash and let me pay by myself.
- ska 7y ago
  I probably wasn't clear enough. Lots of countries have laws constructed so can't have an end run around entitlements, etc. So tse your example you are quite right that you don't have an option to hire someone as an employee without a work visa, for example. But that doesn't mean that your working arrangement is legal if you have them as a non-resident contractor. Some of the things you may could run you afoul of employment law; for example if your contractor visits you performs work you may be in violation. Or they may have thus created a tax presence in your country as a non-resident that you are responsible to withold even though you are not employing them directly, etc (i.e. without a zero-rating treaty). Finally some of your contract terms may just be uninforceable but that is less of an issue. In general this stuff is tricky and very much dependent on the countries involved, the nature of the work being done, and the physical locations it is done in (and probably more things). Again, IANAL.

by ska 7y ago

em-bee 7y ago

(i appreciate your response, and i do not want to appear to pick your statement apart for the sake of arguing. if anything it's my ignorance showing in this matter. apologies for that) but doesn't any of what you say imply a treaty between those two countries? this is getting of course country specific, but my company has hired people in other countries before. and the problem is not trying to get around employment law, but rather that i don't see any options to treat that person as an employee. we can not employ anyone unless they have the legal right to work in the country of employment. to be an employee in a US company, i need to have a work visa for the US. i do not see any other option there. for this to work without a visa, there would have to be a category of foreign remote employees. i have never heard about any such thing. in other words, without a treaty between the respective countries, an employer/employee relationship is not legally possible. how would you pay my social security or insurance? without a treaty that defines this, you can't. you have to give me the cash and let me pay by myself.

ska 7y ago
I probably wasn't clear enough. Lots of countries have laws constructed so can't have an end run around entitlements, etc. So tse your example you are quite right that you don't have an option to hire someone as an employee without a work visa, for example. But that doesn't mean that your working arrangement is legal if you have them as a non-resident contractor. Some of the things you may could run you afoul of employment law; for example if your contractor visits you performs work you may be in violation. Or they may have thus created a tax presence in your country as a non-resident that you are responsible to withold even though you are not employing them directly, etc (i.e. without a zero-rating treaty). Finally some of your contract terms may just be uninforceable but that is less of an issue. In general this stuff is tricky and very much dependent on the countries involved, the nature of the work being done, and the physical locations it is done in (and probably more things). Again, IANAL.