Working remotely in Ireland for Australian company

token101

I'm not really sure if this is the right forum or the business one might be more suitable, but I'm just wondering if anyone has any experience of working remotely for a foreign company? At the minute I'm in Australia working for a company, but the work I do could be done remotely and this was just an idea that I wanted to look into. I'm pretty much at a starting point here, I haven't done an much prior research.

Assuming the company would agree to such an arrangement, what exactly would be involved from my side in Ireland? Would I be able to work as an employee for that company or would I have to set up as an independent sub contractor of some sort? What would be the story with tax? If was an independent contractor in Ireland would I pay the same tax as self employed tradesmen etc? What sort of costs would the company incur because they are registered outside of Ireland? Would there be additional costs there outside of my wages? Again, this is just something I'm toying with, I haven't asked my employer anything but I'd just like to go armed with some sort of info if I was to go asking.

Thanks

helimachoptor

No a direct relation, but i have a friend working for Ericsson Spain, but he's teleworking from Crete, the client is Bell Canada or someone.
Does require a few late nights, but at the review all parties said they were happy.

Your biggest issue will be hours.
Will they want you up and online on Oz time?

token101

No, if anything time would actually be more suitable in Ireland, here I work nights because the client is American. So I'd be working something like 11-7 Irish time Monday to Friday.

Nody

Before you build up any further ideas I'd ask the company about it.

helimachoptor

Agree with nody, before you can planning you need to gauge what the company is thinking

RATM

Regarding tax - if you spend 183 days or more in a calender year on Irish soil then you will be resident for Irish tax purposes and will be taxed according to Irish tax law and rates.

As a teleworker the really smart thing you could do here is to spend 6 months during the winter working from somewhere sunny like Bermuda and the remainder working from Ireland. Then you'd have only a tiny tax liability and depending on your salary it could put an extra €20k per year in your back pocket. And a tan on your skin

token101

Nody wrote: »

Before you build up any further ideas I'd ask the company about it.

helimachoptor wrote: »

Agree with nody, before you can planning you need to gauge what the company is thinking

I know yeah, it is pie in the sky stuff I just wanted a bit of info so I'd have some sort of idea of what I was asking for rather than walk in empty handed. I really wanted to know if there was any major legal impediments that I wasn't aware of, but doesn't seem to be.

RATM wrote: »

Regarding tax - if you spend 183 days or more in a calender year on Irish soil then you will be resident for Irish tax purposes and will be taxed according to Irish tax law and rates.

As a teleworker the really smart thing you could do here is to spend 6 months during the winter working from somewhere sunny like Bermuda and the remainder working from Ireland. Then you'd have only a tiny tax liability and depending on your salary it could put an extra €20k per year in your back pocket. And a tan on your skin

Bermuda! Jesus and I thought I was getting carried away :pac: I don't tan anyway, but assuming I stayed in Ireland 365 days of the year what sort of tax would I be paying? It wouldn't be the 12.5% corporate tax rate would it???? Because that would be nice

Mrs OBumble

RATM wrote: »

Regarding tax - if you spend 183 days or more in a calender year on Irish soil then you will be resident for Irish tax purposes and will be taxed according to Irish tax law and rates.

As a teleworker the really smart thing you could do here is to spend 6 months during the winter working from somewhere sunny like Bermuda and the remainder working from Ireland. Then you'd have only a tiny tax liability and depending on your salary it could put an extra €20k per year in your back pocket. And a tan on your skin

Warning Will Robinson: I don't know that this is totally correct any more. And there are issues about being automatically tax-resident the following year .. I don't know the details.

But in short - get tax advice from real tax professionals, not randoms on the interweb.


Also, I agree with the other posters re sussing it out with the company before progressing. Remote country working is not nearly as widely accepted in Australisia as it is in Europe whether the other country may only be a short trip away.

Honey-ec

token101 wrote: »

assuming I stayed in Ireland 365 days of the year what sort of tax would I be paying? It wouldn't be the 12.5% corporate tax rate would it???? Because that would be nice

You wish. You'd be paying Irish income tax. Assuming the company would keep you on as an employee (as opposed to you being a self-employed contractor), that would be PAYE at 20% of the first €32,800 you earn and 41% on anything over that, plus USC at 2% on the first €10,036, 4% on the next €5,980 and 7% on anything above that.

You'd also have to pay PRSI, but I don't have the rates for that handy at the moment.

You would get certain tax credits depending on your personal circumstances, but for argument's sake we'll say your a single person with no kids, so your tax free allowance would be €3,300. There are other credits available, but that's the main one.

Tbh, I'd be amazed if your employer agrees to this.

RATM

Mrs OBumble wrote: »

Warning Will Robinson: I don't know that this is totally correct any more. And there are issues about being automatically tax-resident the following year .. I don't know the details.

But in short - get tax advice from real tax professionals, not randoms on the interweb.


Also, I agree with the other posters re sussing it out with the company before progressing. Remote country working is not nearly as widely accepted in Australisia as it is in Europe whether the other country may only be a short trip away.

I beg to differ and nor I am a 'random on the interweb' - I'm currently sitting the Tax Institute exams to get my AITI qualification and have been studying tax residency rules and how tax exiles operate within the law only as recently as last Saturday. It is an area of special interest to me- there are now over 11,000 Irish tax exiles so the days of it being the preserve of millionaires are long gone- any teleworker or contractor who can work remotely can save themselves significant sums of money and increase their standard of living by 20-30% if they are willing to live and work in a low or zero income tax country for at least 6 months of the year. All the recent tax hikes we have had in budgets over the last five years are driving mobile Irish professionals to live and work elsewhere and thus save themselves thousands off their tax bills every year. It is a new reality and anyone who has a large tax bill but who has the option to work from anywhere in the world would be crazy to not at least consider their options.

I personally know of two people who are doing this in Bermuda. One of them has a plan is to do it for 5 years, during which time he'll have saved over €150,000 in Irish income tax which isn't too shabby IMO- it is the price of an average 3 bed house in Ireland. But it all depends on your salary and how much you're earning, how much your Irish tax liability would be. For high earners who go into the 41% income tax rates becoming a tax exile for a few years can often be worth their while. Plus you get to avoid dark Irish winters.

On top of that any investments the tax exile has and are liquadated can the avoid paying 33% capital gains tax- again this is a complex area and has lots of variables such as the type of asset, where it is located and where the profits will be remitted to (if to Ireland then Revenue will want their slice). But again by becoming a tax exile then that person can make investment which, when structured smartly, can avoid capital gains tax entirely.

I can't offer tax advice because with tax matters every case is different. And nor am I going to offer individual tax advice as I'd likely be breaking some charter rules. And even if I wasn't breaking charter rules I still shouldn't offer tax advice because I don't know the OP's current tax status as to where his domicile lies or f he is an Irish citizen by birth, I don't know if he has changed his domcile to Australia or is an Irish domicile and I don't know if he has lost his Irish ordinary tax residency by virtue of living in Australia for X amount of years (typically 3). So any advice offered wouldn't be valid without knowing all the facts of his particular situation.

But the point I made still stands - if he spends 183 days or more outside of Ireland (or 280 days over a preceding two year period, its called the look-back rule) then it is likely the case that he can be considered a non-resident for Irish tax purposes and thus save on paying Irish income tax by living in a zero income tax country like Bermuda, which levies a 1% tax on property values and charges nothing else, 0% income tax, 0% capital gains tax.

token101

Honey-ec wrote: »

You wish. You'd be paying Irish income tax. Assuming the company would keep you on as an employee (as opposed to you being a self-employed contractor), that would be PAYE at 20% of the first €32,800 you earn and 41% on anything over that, plus USC at 2% on the first €10,036, 4% on the next €5,980 and 7% on anything above that.

You'd also have to pay PRSI, but I don't have the rates for that handy at the moment.

You would get certain tax credits depending on your personal circumstances, but for argument's sake we'll say your a single person with no kids, so your tax free allowance would be €3,300. There are other credits available, but that's the main one.

Tbh, I'd be amazed if your employer agrees to this.

I know the employee tax rates, it was one of the reasons I left to begin with! But they wouldn't agree to keep me as an employee, it would probably be as an independent contractor if at all. Yeah I agree, it's unlikely but it's worth a shot anyway.

Jim2007

token101 wrote: »

I know the employee tax rates, it was one of the reasons I left to begin with! But they wouldn't agree to keep me as an employee, it would probably be as an independent contractor if at all. Yeah I agree, it's unlikely but it's worth a shot anyway.

Another big issue you need to consider is the whole social welfare issue, who are you going to be covered for pension, long term sickness, accident and disability as well as unemployment of course.

token101

Jim2007 wrote: »

Another big issue you need to consider is the whole social welfare issue, who are you going to be covered for pension, long term sickness, accident and disability as well as unemployment of course.

Probably have to get my own health insurance, not exactly overly concerned about pension as yet to be honest, I'm 26. It'd be something I'd explore independently in a year or two down the road. Unemployment, assuming it went through fine but went bad six months or a year later, where would I stand getting any sort of welfare? Would I even be entitled to JA?

Jim2007

token101 wrote: »

Probably have to get my own health insurance, not exactly overly concerned about pension as yet to be honest, I'm 26. It'd be something I'd explore independently in a year or two down the road. Unemployment, assuming it went through fine but went bad six months or a year later, where would I stand getting any sort of welfare? Would I even be entitled to JA?

Well to qualify for a state pension you need to make a certain number of contributions over your working life and as this changes from time to time it is a good idea to make voluntary in situations where you are not making mandatory contributions so that your sure to qualify - it does not cost much so it is well worth doing.

Disability and loss of income is also something to address. Again I think you can make voluntary contributions for disability, but I'm not sure. I can't emphasise how important this is, as it all to easy to have an accident and be unable to work for a period.

I've no idea about unemployment benefit, but I'm sure that you are not the first one to be on the payroll of a company that is not registered in Ireland, so I fully expect that the PRSI guys have a way of dealing with it. Best idea would be to just give them a call and explain what you are considering. I know for instance here in Switzerland you can just make voluntary contributions of a few hundred francs each year and you are covered.

token101

So the IT company I work for has (tentatively) agreed to let me telework! I was pretty amazed at the meeting when they said but they've basically asked me to go and get some more info on how exactly it would work, whether they'll be needing to set up a subsidiary in Ireland or whether I just get a VAT no. From the little research I've done, I know there's a tax treaty between Ireland and Oz to avoid double taxation but I'm not really sure who to talk to next. I'm still here in Oz as well so it'd have to by phone. Would it be a solicitor to try set up some sort of company for myself or would it be some sort of specialised tax professional? I can't imagine the average tax accountant would deal with this sort of thing every day. I know I could ring the Revenue, but I'm sort of reluctant to do that because they've given the wrong advice before and I don't exactly trust them to advise me of what would be in my best interests!

Mrs OBumble

I'm sure it's not a solicitor you want. More like an accountant with experience in this sort of setup. Suspect they will have to set up some sort of subsidiary here ...

RATM

Token, for overall advice what you need is a tax specialist. This is because you need a holistic approach to all your tax affairs, especially if they are spread over two countries.

As regards a company www.cro.ie is the main port of call.

I would advise that you look into umbrella companies as they may be more tax efficient for your circumstances. Any good tax specialist can set you up an umbrella company. There are several large operators on the market, I am not recommending any of them, just making you aware of their existence-

www.fenero.ie
www.cxc.ie
www.iconaccounting.ie

These are the main players, a lot of tax accountants also offer the same services that they do and may work out cheaper

They do all the leg work so you don't have to but they charge approx €100 a month to do so. You can do the exact same yourself but often for IT contractors they prefer to let someone else manage their tax affairs, especially so they know that they are claiming all available allowances and reliefs on their behalf. Accountants fees are also a deductible expense.

Hope this helps

JustAThought

Dont forget to research the ( big) differences between you setting up a company as opposed to operating As a Sole Trader. Especially as you will be working & providing services to American firms . I think the website oasis .gov or . Org has stuff on this . If you are a
Sole trader working in Ireland you can kiss any SW goodbye if they let you go .

How will distance working affect your ability to work in oz should you need/want to return or change employment ? Probably a lot.
Worth a think.

Also don't forget , you will be liable for the tax for the following year in advance - and this will be based on your precious years earnings so Mind the gap if you a lot they reduce your hours- you will have to wait til the end of the year to try and get it back.

Just some thoughts .

Best of luck .

irishboyrudy

Hi Token101,

How did this work out?

cusser

sorry I had to delete my post..as I thought I was in private messages. Am new to the forum...