Invoice - New to Contracting

[SueEllen]

No, you are wrong. The 183 day rule is a fundamental treaty obligation that each member state of the EU must honour and which is enforceable through the European court.

Boo

The treaty is interpreted differently in different EU countries.

So while a company can send an individual to work in another EU state, depending on that country's tax laws that individual may have to pay personal taxes on income earned in that country from day one. However the company will not have to pay company taxes in that country for at least 183 days if the company is not considered resident.

For example in the case of Germany, France and Norway the government tries to tax individuals from day one on income earned in that country. In the case of Sweden and Finland the government taxes individuals on income earned in that country only if they spend more than 183 days in the country.

Added to that there is not no consistency in the EU of how those days are calculated, and whether a limited company with one director is considered resident in that country or not.

Some of the large consultancies e.g. Accenture have tried to get around personal tax laws for their staff and found they can't.

[Boo]

So while a company can send an individual to work in another EU state, depending on that country's tax laws that individual may have to pay personal taxes on income earned in that country from day one. However the company will not have to pay company taxes in that country for at least 183 days if the company is not considered resident.

No, that is not correct. An employee of a UK company, seconded to work abroad in the EU is not liable for tax in the destination country provided their secondment lasts lkess than 183 days. That is the entire content and point of the 183 day rule in fact.

Boo2

[SueEllen]

No, that is not correct. An employee of a UK company, seconded to work abroad in the EU is not liable for tax in the destination country provided their secondment lasts lkess than 183 days. That is the entire content and point of the 183 day rule in fact.

Boo2

Wrong for the reasons I listed above.

I'm on a phone so can't provide links.

There is a thread about Germany on this board anyway. The OP should read that.

[BlasterBates]

Sue Ellen is quite right on this issue.

Contractors' Questions: Can I use my limited company to work outside of the UK? :: Contractor UK

the 183-day rule, in the vast majority of cases, does not apply to contractors working through their Limited Company. If you start a contract in a foreign country, you are liable for income tax on that income in that country from day one: tax is due where money is earned.

The 183 day rule determines whether you are tax resident. However non-tax residents still pay tax. This is a bit of a myth that if you are not tax resident you have no tax obligations.

Just as an example here is the UK goverment site on the tax obligations of a non-tax resident.

https://www.gov.uk/tax-foreign-income/residence

Non-residents only pay tax on their UK income - they don’t pay UK tax on their foreign income.

As Sue Ellen has pointed out there are exceptions. In fact if you work for a UK based client in Germany for less than 183 days you can indeed use your Ltd and you are exempt from German tax. This does not apply though to a UK agency, i.e. it is the end client that counts. e.g. when the contractor is a supplier to a UK company installing equipment in Germany.

There are one or two posters who actually do that.

[stek]

No, that is not correct. An employee of a UK company, seconded to work abroad in the EU is not liable for tax in the destination country provided their secondment lasts lkess than 183 days. That is the entire content and point of the 183 day rule in fact.

Boo2

Completely wrong I'm afraid.