I’ve had a google on this topic and not really found the answer that I’m looking for.
We are currently using a contractor who is based in Lithuania and whilst he is invoicing us on a monthly basis for his hours (he is working full time for us on a 1 year contract), we are still deciding on the best way in which he should additionally be compensated for his expenses i.e. flights, hotels, other travel.
Our concern is that adding this onto his invoice will therefore be taxable, either he loses out or we will have to pay additionally to account for the added tax.
We are looking for the most practical solution for both parties. If we were to pay directly for expenses where possible, particularly flights and hotel costs does this resolve the issue or are there further considerations here too?
I’m posting the question on here as my fear is that neither our finance nor HR resources here really know the answer to this.
If anyone has been in this situation before and has any guidance it would be much appreciated.
Thanks in advance,
Hai Nguyen
