Self Employed?

gue_nica

Hi everybody,

I am an italian citizen. Recently I moved to Ireland for family reasons. I work as an indipendent web editor, communication advisor, youth trainer and I have different customers (mainly in Italy but also from other countries - France, Germany, ecc.)

My income are generally quite low, about 10.000 per year (net).

How can I handle the tax aspect with this kind of Job in ireland?

I need to give to my customers a receipt for their payment.

Should I work as self-employed? or start a company?

Is it expensive or is it difficult from the bureacratic point of you?

Is there any place where I can go, explain my situation and have some free advice about this?

Thank you in advance for all the suggestions!

mikey767

The first step would be to establish your domocile, assuming that you still have connections with Italy (i.e family, property etc.) you would be Italian domociled. As a foreign domociled individual, you are only liable to Irish tax on foreign income actually remitted to Ireland. Therefore if you make sales abroad, and don't remit the income to Ireland, no charge to Irish tax would arise. You may still be liable to tax in the country that you generated the income in, and possibly Italy if you are resident and ordinary resident there. If you do remit the income the double taxation treaty with the other country would need to be considered. There are also other reliefs that could be considered.

If you were to set up a company, the company would likely be considered Irish resident and would therefore be liable to Irish tax on all its income. Again the double taxation treaty would need to be considered. You would be subject to Irish Income tax on any money taken out of the company (i.e Wages). The cost of company formation in Ireland can be high, and annual returns and accounts have to be filed annually which can also be expensive therefore I would advise, based on your expected turnover, to remain as a sole trader and remit the bear minimum to Ireland. You should set up a new bank account in Italy and have all monies paid into this new bank account. This prevents new income being mixed up with old money which you already have paid taxes on. This old money can be remitted to Ireland without payment of tax.You should also seek tax advice in each of the countries that you operate.

The_Bot

mikey767 wrote: »

The first step would be to establish your domocile, assuming that you still have connections with Italy (i.e family, property etc.) you would be Italian domociled. As a foreign domociled individual, you are only liable to Irish tax on foreign income actually remitted to Ireland. Therefore if you make sales abroad, and don't remit the income to Ireland, no charge to Irish tax would arise. You may still be liable to tax in the country that you generated the income in, and possibly Italy if you are resident and ordinary resident there. If you do remit the income the double taxation treaty with the other country would need to be considered. There are also other reliefs that could be considered.

For the sake of clarity, and because it is not clear from the OP where the foreign customers will be serviced from, just because a trader has foreign customers does not make income received from those customers foreign source income.

What mikey correctly describes is known as the remittance basis of taxation for Irish resident but non-Irish domiciled individuals. However, a key concept of the remittance basis that it applies to foreign source income only, which for Irish tax purposes is not necessarily the same as foreign income as it might be commonly understood.

In the context of trading income, in order for the income derived from that trade to be foreign source income the trade must be carried on wholly outside of Ireland. If any part of the trade is carried on inside Ireland, then all the income of that trade is considered to be Irish source income.

Therefore, for trading income and the remittance basis, what is relevant it is not where the customers are based but where the work carried out to deliver the goods/services of that trade to the customer actually happens. If any of it happens in Ireland, then for an Irish tax resident the entire income of the trade is Irish source income and does not qualify for the remittance basis.

For example, if an Irish resident but non-Irish domiciled individual provided services from Ireland, via the internet, to customers in every country but Ireland then, in my opinion, for Irish tax purposes all of that income would be Irish source income, notwithstanding that none of the actual cash received was from Ireland.

Alan Shore

@The Bot could not have put it better myself.

The_Bot

Alan Shore wrote: »

@The Bot could not have put it better myself.

Thanking you Alan.