Working in Ireland through US client
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    Default Working in Ireland through US client

    Hello,

    I am new to contract world and have registered a pvt ltd company in UK. I have received contract from US client to work for their end client in Ireland. The billing will be to the US firm. The location of work will be in Ireland (5 days a week, commuting back to London on weekends). The initial contract is for a year.

    I am with InniAccounts and they said they can't help me with this and I will need to contact 'overseas tax adviser' I don't know any so I'm posting it here.

    - VAT, will I need to charge VAT to the US firm (they says it's not applicable)
    - Salary, will it be in UK or Ireland? What about taxes?
    - Dividend and corporate taxes? again UK or Ireland tax laws or is it mix of both?

    For first timer, is it worth taking this contract? (in terms of hassle)

    Regards,

    SK

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    Quote Originally Posted by siddhantkumar View Post
    Hello,

    I am new to contract world and have registered a pvt ltd company in UK. I have received contract from US client to work for their end client in Ireland. The billing will be to the US firm. The location of work will be in Ireland (5 days a week, commuting back to London on weekends). The initial contract is for a year.

    I am with InniAccounts and they said they can't help me with this and I will need to contact 'overseas tax adviser' I don't know any so I'm posting it here.

    - VAT, will I need to charge VAT to the US firm (they says it's not applicable)
    - Salary, will it be in UK or Ireland? What about taxes?
    - Dividend and corporate taxes? again UK or Ireland tax laws or is it mix of both?

    For first timer, is it worth taking this contract? (in terms of hassle)

    Regards,

    SK
    Close your UK company. Talk to Icon Accounting in Ireland and set up as via a director's umbrella. Are you an EU citizen?
    Let's give our NHS the £350 million the EU takes every week.

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    Where will the US co pay you? gross of local tax and social insurance, and in what currency?
    Entropy is NOT what it used to be.
    Inertia, however........................

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    Hi. I'm a UK Citizen

    US firm will pay in GBP to my UK account

    The rates are per day basis. I have to arrange my travel and accommodations. (the rates reflects the expenses)

    If I open umbrella company in Ireland, how's tax structure will work? Is there any tax calculator or link where I can get this information? If it's too much hassle, I will stay in my permanent job and not accept this contract.

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    Quote Originally Posted by BR14 View Post
    Where will the US co pay you? gross of local tax and social insurance, and in what currency?
    The OP's Irish Ltd should invoice the client in the agreed currency and then pay the OP salary in Euro deducting Irish income tax, PRSI and aUSC.
    Let's give our NHS the £350 million the EU takes every week.

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    Quote Originally Posted by Old Greg View Post
    The OP's Irish Ltd should invoice the client in the agreed currency and then pay the OP salary in Euro deducting Irish income tax, PRSI and aUSC.
    Does it mean, dividend etc will be taxable as well? (i.e. at higher rate of 40%!)

    Also, travelling back to London every friday over weekend won't be tax deductible?

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    Quote Originally Posted by Old Greg View Post
    The OP's Irish Ltd should invoice the client in the agreed currency and then pay the OP salary in Euro deducting Irish income tax, PRSI and aUSC.
    Sounds right, but US companies sometimes have difficulty understanding these things.
    (like, there ARE other countries, with laws)
    Entropy is NOT what it used to be.
    Inertia, however........................

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    The Irish Revenue will have place of supply rules for VAT, but I'm pretty sure it will be outside of the scope of VAT, as it would be in the UK (unless you're delivering something covered by a specific rule, which I doubt).

    In terms of US tax, YourCo will be invoicing for (and receiving) non-US-source income (the work is performed in Ireland) as a non-US-person (YourCo is not incorporated in the US), so there's no US withholding. They may ask you to complete a W8-BEN-E on behalf of YourCo. This is their responsibility (to ask and report upwards, if required), not yours.

    The above assumes an Irish Ltd and that you're not a US citizen. I can't comment on the specifics of Ireland and whether it makes sense to use a Ltd or an umbrella.

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    Quote Originally Posted by jamesbrown View Post
    The Irish Revenue will have place of supply rules for VAT, but I'm pretty sure it will be outside of the scope of VAT, as it would be in the UK (unless you're delivering something covered by a specific rule, which I doubt).

    In terms of US tax, YourCo will be invoicing for (and receiving) non-US-source income (the work is performed in Ireland) as a non-US-person (YourCo is not incorporated in the US), so there's no US withholding. They may ask you to complete a W8-BEN-E on behalf of YourCo. This is their responsibility (to ask and report upwards, if required), not yours.

    The above assumes an Irish Ltd and that you're not a US citizen. I can't comment on the specifics of Ireland and whether it makes sense to use a Ltd or an umbrella.
    Director's Umbrella.
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    Agreed, but there is no real tax efficient contractor structure available in Ireland. No concept of dividends, and very little claimable as legitimate expenses.

    So it.s €33.6K at 25%, then 40%, then the killer, uncapped PRSI (NI) employees and employers, 5% each, and USC (Universal Social Charge) of 4%, so look at netting around 55%.

    If you’re running a place in UK too, it will cripple you, Dublin prices for accom. are super-high...

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