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Tax on income from American company

  • 22-02-2018 10:48pm
    #1
    nino1
    Registered Users, Registered Users 2 Posts: 829 ✭✭✭


    I am a paye worker and have just signed a contract with a US based company as an independent contractor.
    I am not an employee of this company and most of the work will be done remotely in Ireland but some will involve conferences
    in the states where I am paid a fixed hourly rate.

    I assume if I don't travel to the US at all that the IRS is not involved at all and all tax is payable in Ireland.
    If I do travel to the US does that involve the IRS or can I still do all tax through Ireland?

    On signing the contract they want me to fill out a IRS form w-8BEN certificate of foreign status of beneficial ownership.

    I will of course be getting professional advise on this but interested in opinions in the meantime.


Comments

  • #2
    Peregrinus
    Registered Users, Registered Users 2 Posts: 26,998 ✭✭✭✭Peregrinus


    nino1 wrote: »
    I am a paye worker and have just signed a contract with a US based company as an independent contractor.
    I am not an employee of this company and most of the work will be done remotely in Ireland but some will involve conferences
    in the states where I am paid a fixed hourly rate.

    I assume if I don't travel to the US at all that the IRS is not involved at all and all tax is payable in Ireland . . .
    Not necessarily a sound assumption. In the absence of special arrangements or agreements, the US takes the view that it can levy tax on (a) the worldwide income of US citizens, no matter where they live; (b) the worldwide income of non-citizens who are resident in the US; and (c) the US-sourced income of non-citizen non-residents. You'd be in group (c) there.

    Happily, though, there is a special arrangement which is relevant here; the Ireland-US Double Taxation Agreement. Under that agreement, income derived from '"independent personal services" provided by a person who is resident in one country to a customer/client in the other country is taxable only in the country of residence, unless the service provider has "a fixed base regularly available to him in the other [country] for the purpose of performing his activities".

    So, travel to the US to meet your clients or for conferences, presentations, etc - not a problem. But if matters get to the point where you have "a fixed base regularly available to you", then your US-sourced earnings would attract US tax. Obviously, if you rented an office or something, this would catch you. What's the position if, say, your agreement with your clients involves them providing you with a room, a desk, a computer, etc, whenever you are over? I think that's probably not a "fixed base regularly avialable", but that's the kind of thing you'll be wanting your professional advice to be focussing on.


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