Employee working abroad, tax situation?

JKM

This is a complicated situation so please bear with me. I recently contacted our local revenue office with a query and the reply I got back, although answering my basic question, left me with quite a few more, so I am hoping someone here might be able to help me. The easiest thing to do might be copy and paste the email I sent so here it is:

To Whom It May Concern:

I wish to make an inquiry relating to a current employee who was resident and working for us in Ireland and who has now moved to the USA. This employee will continue to be employed by us as she is able to carry out her role remotely and continues to be paid to her Irish bank account. She is an Irish citizen and was resident in Ireland for 29 years previous to her move. Her time in the USA will be 3 years initially based on her current Visa.

My query relates to whether we will continue to deduct Irish tax on a PAYE basis for this employee?

I would appreciate if you could give me guidance on this or let me know where I might be able to get the information I require.


Just a few points to add, I obviously included our employer number in the original email but will omit it here, so the revenue knew all our information in that regard. Also, we are a small rural family owned and run Irish business (sole trader, not a company) and are only based in Ireland. The employee is carrying out all duties in the USA but all duties are relating to our Irish business.

So the reply I got back (very short) was basically that tax shouldn't be deducted and that an exclusion order would have to be requested in order to do so. That is fine but I was hoping for a bit more clarification in terms of how we do go about paying her wages to her. Our payroll software doesn't appear to have any settings that allow us to have her listed as an employee but not deduct tax. Do we just pay her her gross wages? And is it still OK to keep paying her to her Irish account or does her pay have to be sent to a US account? How do we account for these wages? i.e. do we just declare the gross pay at the end of the year separate to all employees who are processed through our payroll software? We currently submit P30 (generated by our software) via ROS on a quarterly basis. Also, do we still have to pay employers PRSI?

OK I know that is a lot of questions and I am not sure if anyone here can help but I hope so because I would prefer not to have to contact the revenue again unless absolutely necessary.

Oh and here is the complicated bit.. I am said employee!! I have worked with this business (as mentioned above it is a family business and I am family!) doing all the bookkeeping and payroll etc for the last 8 years and my husbands job was recently moved to the US. With current technologies it was very easy for me to continue in this role working remotely and it was mutually beneficial for both of us to do so. Now I just have to figure out how to account for it from the businesses perspective and how/to whom I declare and pay tax on my earnings.

Thanks so much for reading this. Fingers crossed someone can help me.

lonestargirl

Slightly sideways question but does your visa type give you permission to work in the US? This kind of remote working is still considered employment.

In the US you will file a joint tax return with your husband at the end of the year declaring your earnings.

JKM

No problem, thanks for your reply. I should have mentioned, but yes, I am fully authorised to work over here. I applied for and received my Employment Authorisation Document (EAD) shortly after getting here.

Filing the return over here should be be straight forward enough and we have to do it for my husband anyway. I wonder as I am being paid by Euro into my Irish account will I have to do an historic currency conversion for each payment (given that it fluctuates almost daily) to arrive at my US Dollar earnings?? I would organise to have my wages paid to our US account but it will cost too much for the business in terms of international transfer fees etc. And in any case I still use my Irish account to pay Irish loans/bills etc.

srsly78

Isn't it your job to sort this stuff out!? Start by getting professional advice surely...

JKM

Um yeah.. that's what I am doing! It is also part of my job, or moreover what I feel to be a moral obligation, to try and not cost my family's already struggling business any more expense by seeking professional advice if I can sort it out by alternative means.. i.e. by asking for advice from the Revenue Commissioners and the nice folks on here.

If you don't have anything constructive to add then why bother commenting?

srsly78

Advice isn't allowed on this forum for legal reasons. If you were to get the wrong advice it might end up costing you lots. We can only really point you at www.revenue.ie or www.irs.gov, or tell you to get professional advice. For what it's worth, I think it's the IRS you should ask, not the Irish Revenue.

JKM

Okay, fair enough, thanks for pointing that out. I thought it was worth a shot asking on here. I like many other people either involved in a small family business or setting up a small business have to be jacks of all trades and fill in where your needed.. in my case the office when my mother couldn't do it any longer. Consequently I have just been learning everything as I go along, legislative, bookkeeping, HR, payroll etc etc. I have a small bit of accountancy training but nothing on the payroll side.

I will try revenue again because I am more concerned about how or what needs to be declared on the business end. I have until next April to figure out the US side. I guess if they can't (or won't) clarify I will have to bite the bullet and get on to our accountant for advice.

3DataModem

Your accountant will say "get a us tax advisor or accountant"