Quit European contract or pay 10k back taxes?

[camfish]

Probably a bit last minute to post this, but any advice would be appreciated.

I'm almost at the end of a 6 month contract in Europe, and have been offered an extension to the end of next year, but will have to pay 12,000 Euros back tax if I stay longer than 183 days. The net cost to me will be about GBP 6k after claiming back the uk taxes I've paid.

It's a good gig with a well-known company, and I've already verbally agreed to stay, but it's going to be sooo painful handing over that amount to a foreign Hector.

Is it a good time to go back to blighty looking for a new role? Or should I bend over and pay the cash, and improve my CV by %200 while earning slightly more than enough to live on (after the stupidly high tax rate here)?

Ideas/suggestions?

[Clippy]

Difficult to say exactly without knowing what your skillset is but looking for a contract at this time of year is tough as it is let alone during a recession.

If you are enjoying what you are doing then sit tight - as you say, it is good experience and at least you are not making a loss.

And get over the fact you are having to pay taxes to a foreign Hector - they are all the same () whether he has a French, Dutch or British accent.

[camfish]

Difficult to say exactly without knowing what your skillset is but looking for a contract at this time of year is tough as it is let alone during a recession.

If you are enjoying what you are doing then sit tight - as you say, it is good experience and at least you are not making a loss.

And get over the fact you are having to pay taxes to a foreign Hector - they are all the same () whether he has a French, Dutch or British accent.

Yes, that's what I'm starting to think. And my skillset is nothing to shout about. I'm a test engineer (but doing something fairly specialised) with coding experience, and currently doing some test automation using Python. I'm certainly not a box ticker like some of the Bobs and Bobettes at the client's site. Where does the term 'Bob' come from anyway?. I'm guessing it refers to our 'colleagues' from the Indian sub-continent?

Thanks for the input.

[BlasterBates]

In fact you can't exclude the possibility, admittedly remote that you should pay tax anyway on your 182 days. There was a posting on this, that "Hectors" can demand you pay tax from day one. That is because the 183 day rule applies to personal residency and not business tax residency. The rule for business tax residency is woolly indeed, i.e. where is the economic interest of the business, and if you are a sole director and working there the foreign Hector could demand tax on your activities in their country. In fact this in the DTA for businesses, that activities you do in their land should be taxed there. So maybe you aint losing anything anyway. In fact the posting on this from a tax expert in this forum was quite explicit about Germany, they expect tax from day one not day 183.

[camfish]

In fact you can't exclude the possibility, admittedly remote that you should pay tax anyway on your 182 days. ...

I'm 100% sure that paying UK taxes is OK for 6 months, so I don't think that's an issue.

Anyway it loooks like I'll be staying, so now I just have to come up with an excuse for not registering with the local police within 3 months - could be a small fine at most - oops.
And then I have to decide whether to pay import tax and registration fees on my motorcycle if I want to bring it here again next summer, as I'll be a resident, so can't use a 'foreign' vehicle. Perhaps I ought to start a new thread on that topic...

[camfish]

In fact you can't exclude the possibility, admittedly remote that you should pay tax anyway on your 182 days. There was a posting on this, that "Hectors" can demand you pay tax from day one. That is because the 183 day rule applies to personal residency and not business tax residency. The rule for business tax residency is woolly indeed, i.e. where is the economic interest of the business, and if you are a sole director and working there the foreign Hector could demand tax on your activities in their country. In fact this in the DTA for businesses, that activities you do in their land should be taxed there. So maybe you aint losing anything anyway. In fact the posting on this from a tax expert in this forum was quite explicit about Germany, they expect tax from day one not day 183.

Sorry, forgot to mention that I'm currently using a UK umbrella.

[darmstadt]

Sorry, forgot to mention that I'm currently using a UK umbrella.

and

Anyway it loooks like I'll be staying, so now I just have to come up with an excuse for not registering with the local police within 3 months - could be a small fine at most - oops.
And then I have to decide whether to pay import tax and registration fees on my motorcycle if I want to bring it here again next summer, as I'll be a resident, so can't use a 'foreign' vehicle. Perhaps I ought to start a new thread on that topic...

I really hope you're not in Germany because everything you've said above could put in the slammer

[contractorcontractor]

Cross border worker status?

when i worked abroad, a colleague got Cross border worker status. He was taxed in the uk and used their uk registered cars.

As a resident after 180 days, it wasnt possible to get cars registered because the locals wanted bribes and the beauracrats made it as difficult as possible. That meant renting/buying a local car

Cross-border workers - European commission

[camfish]

and



I really hope you're not in Germany because everything you've said above could put in the slammer

No, it's Finland. Using a UK umbrella is perfectly legit here for 183 days - I've spoken to the tax people here. If I then stay longer, which is probably what I'll do, there's just the small matter of paying back 6 months worth of taxes, then claiming my UK taxes back. Next April Oh well, it's a good career move. I think.

Not registering after 3 months cost someone a 200 Euro fine

[camfish]

when i worked abroad, a colleague got Cross border worker status. He was taxed in the uk and used their uk registered cars.

As a resident after 180 days, it wasnt possible to get cars registered because the locals wanted bribes and the beauracrats made it as difficult as possible. That meant renting/buying a local car

Cross-border workers - European commission

I'll probably try to get an estimate of the import taxes for my bike. If the cost isn't too high, and I can easily switch it back to the UK registration at the end of summer.... Can't see me buying one here. Anyway, that's if I stay past next spring.