Reply to: Using an EU "billing company" to invoice my client and then pay to my offshore LTD

[BlasterBates]

Generally, you are liable for tax for any income earned in any country. For example if you own a flat in Croatia and you get rent, you are liable for tax in Croatia, even if you've never been there.

[jamesbrown]

You pay tax where the work is done unless it's less than 180 days and other criterias are met.

Typically, false. It's a common mistake to confuse tax on worldwide income (e.g. based on residency, which is in turn based on residency criteria) with tax in general. The general rule, with few exceptions, is that income tax is paid, from day one, where the work is done.

[Brussels Slumdog]

1. You are due to pay tax where the work is done.
2. Being not tax resident does not mean you have no tax liability
3. Agencies don't care how you arrange your matters and if you get prosecuted for tax evasion, so long as they get paid.
4. Everyone is tax resident somewhere. Some people have multiple tax residencies. No-one is tax resident nowhere.
5. Your understanding is lacking.

You pay tax where the work is done unless it's less than 180 days and other criterias are met.
If you are not a tax resident anywhere then no double taxation agreement will relevant to you.
To avoid paying tax in the host country you need to prove that it's payable in your home country

Sent from my SM-A320FL using Contractor UK Forum mobile app

[NotAllThere]

And BTW my understanding also was that you are not tax resident if you don´t live/work in the country for more than 6 months, that is why many agencies let you use your UK LTD instead of paying local taxes.

1. You are due to pay tax where the work is done.
2. Being not tax resident does not mean you have no tax liability
3. Agencies don't care how you arrange your matters and if you get prosecuted for tax evasion, so long as they get paid.
4. Everyone is tax resident somewhere. Some people have multiple tax residencies. No-one is tax resident nowhere.
5. Your understanding is lacking.

[BR14]

My experience is that most don´t care if the contract is outside UK.
And BTW my understanding also was that you are not tax resident if you don´t live/work in the country
for more than 6 months, that is why many agencies let you use your UK LTD instead of paying local taxes.

Aye, - good luck with that, DO let us know how you get on.

[bul]

The dodgy tax implications are the least of the problems, you will find zero agencies who will work this way so it's a non starter, if you go down the ltd route they will insist on a UK company for which you are the majority share holder

My experience is that most don´t care if the contract is outside UK.
And BTW my understanding also was that you are not tax resident if you don´t live/work in the country
for more than 6 months, that is why many agencies let you use your UK LTD instead of paying local taxes.

[SimonMac]

The dodgy tax implications are the least of the problems, you will find zero agencies who will work this way so it's a non starter, if you go down the ltd route they will insist on a UK company for which you are the majority share holder

[northernladuk]

Krugerrands.

They are fine thanks for asking. Bit of cream and they dried up nicely.

[Old Greg]

Just get them to pay you with a cheque and nip down the local cash converters. Sorted.

Oh.. The CUK text editor has gone all Millennial on me. It does't know what cheque is and is trying to auto-correct it to quench. That's lit AF!

Krugerrands.

[northernladuk]

Lit?

Yeah.. AF!

Millennial speak or summat. Sick innt.

[fidot]

Lit?

[NotAllThere]

Oh.. The CUK text editor has gone all Millennial on me. It does't know what cheque is and is trying to auto-correct it to quench. That's lit AF!

That'll be your browser.

[northernladuk]

Just get them to pay you with a cheque and nip down the local cash converters. Sorted.

Oh.. The CUK text editor has gone all Millennial on me. It does't know what cheque is and is trying to auto-correct it to quench. That's lit AF!

[NotAllThere]

Where you work is where you pay tax. No-one is tax-resident nowhere.

[meridian]

Yeah, I know it sounds dodgy, but my situation is, not always, that I am not resident in any counntry, because my contracts length is 3 or 6 months.

The problem is that clients/agencies FEAR to pay OFFSHORE LTD´s, I know that there are companys out there that will invoice you client for a fee and then pay to any OFFSHORE LTD.

What doo you think about this? is it legal providing I am not resident in any country?
Does anyone knows such billing companies? names? websites?

You’ve got (at least) three separate questions there.
- where do you pay tax?
- where does your company pay tax?
- is factoring legal?

For you personally, as others have said, residency may not be a factor depending on what country it is. For the U.K., for example, even if you are a non-resident you pay tax on what you earn here:

Tax on foreign income: UK residence and tax - GOV.UK

Same for a non-resident company:

Using an Offshore Company | Offshore Formations 24.7

You’ll need to engage an accountant in the client country to determine if the rules are similar there.

Factoring is generally where a company will buy your debts/invoices from you, but you’re still the one that needs to issue the invoice to the client. For another “billing company” to issue the invoice they would need to have the contract with the client.