Tax implications- Working remotely for a US company in Turkey (British citizen)

[Fred Bloggs]

Just one point about residency raised by NAT and Fred Bloggs. There is a double taxation treaty which outlines how residency is determined if you actually satisfy residency requirements in both countries. The double taxation treaty precludes you being resident in both countries, otherwise you'd pay tax twice on some sources of income.

https://assets.publishing.service.go...-_in_force.pdf

Essentially the key criteria is where are your main personal and economic interests. However it makes things a lot easier if you make sure you don't satisfy residency requirements in the UK.

One misunderstanding is that if you are non-resident you aren't subject to tax. If you are deemed to be resident in Turkey but you spend a few weeks working in the UK then that income would be taxed in the UK even though you would be deemed to be resident in Turkey. The UK income would also have to be declared in Turkey but they would take into account tax paid in the UK.

Exactly. I have said more than once here that it's very easy to be tax resident in more than one jurisdiction at the same time. All the time I was working overseas and passing the first statutory residency test I was still taxed on UK derived income even though I wasn't here. I wrapped up UK Ltd Co before leaving.

It actually takes quite a bit of planning ahead to optimise personal situation properly and qualify for split year treatment etc.... Tax status isn't confirmed by the UK until you have been fully outside the UK for an entire tax year following the tax year you left. Anyone thinking they can come here, ask a few selected questions and be home and dry is deluded.

I might be being mildly unfair on the OP but I sense a cunning plan developing where OP thinks he/she won't have to pay any corporate or personal taxes if he/she is clever enough. In that case, I say go fill your boots, what can possibly go wrong with that plan.

I hear the food in Turkish jails is excellent.

[BlasterBates]

Just one point about residency raised by NAT and Fred Bloggs. There is a double taxation treaty which outlines how residency is determined if you actually satisfy residency requirements in both countries. The double taxation treaty precludes you being resident in both countries, otherwise you'd pay tax twice on some sources of income.

https://assets.publishing.service.go...-_in_force.pdf

Essentially the key criteria is where are your main personal and economic interests. However it makes things a lot easier if you make sure you don't satisfy residency requirements in the UK.

One misunderstanding is that if you are non-resident you aren't subject to tax. If you are deemed to be resident in Turkey but you spend a few weeks working in the UK then that income would be taxed in the UK even though you would be deemed to be resident in Turkey. The UK income would also have to be declared in Turkey but they would take into account tax paid in the UK.

[NotAllThere]

Bidi You might not like the tone, but this is very important to understand.

[northernladuk]

Thanks for the links. Just to confirm, Should I set up a company in Turkey and have the US organization pay my wages in there so that my company will be taxed in Turkey and the US will not tax me since I'm not a tax resident and nor will the UK tax me as I am not living there and my company is not set up there either?. Please correct me if I'm wrong.

Sue I'd really like to hear your thoughts on this. I read your post here:

and you are really knowledgeable about this. Thanks in advance.

As I said in your other post. The money the client pays in your company are NOT your wages. Wages are something your company pays you for working for your LTD. You've got to understand that or you'll get nowhere.

[Bidi]

Thanks for the links. Just to confirm, Should I set up a company in Turkey and have the US organization pay my wages in there so that my company will be taxed in Turkey and the US will not tax me since I'm not a tax resident and nor will the UK tax me as I am not living there and my company is not set up there either?. Please correct me if I'm wrong.

Sue I'd really like to hear your thoughts on this. I read your post here:

Working In Europe - A Brief Guide[/SIZE]

and you are really knowledgeable about this. Thanks in advance.

[BlasterBates]

Thank you, I'll definitely have a look at the guidelines.



This is what I was having some difficulty understanding. Assuming I did get a visa to allow me to live and work in Turkey and I did just that. So say I only returned to the UK for a couple of weeks in the year. Would the UK still consider me as a tax resident?.



Just to clarify, are you saying I should open my limited company in Turkey if that's where I intend to live?. I did read the following online with regards to a British citizen working for a US organization not living in the UK or US:

"Make sure the US company is paying you as a contractor, not through their payroll system where they take US taxes out. "

So this had me thinking. In the UK to work as a contractor I would need to open up a limited company and have the organization I am working for pay money into that limited company where I would then be taxed through. If I was working for a US organization as a contractor, would it work the same way?. Meaning, would I need to open up a limited company here in the UK and have the US pay into that limited company?. If so, it may make it difficult to not be taxed in the UK. I guess what you said above would answer this question if I've understood correctly.



Yes I've noticed many European countries are starting/started to introduce digital nomad visas. I'm guessing having one of these visas means your being taxed by that country.

Basically you tax yourself where you work, which sounds like will be in Turkey.

https://www.lawyer-turkey.com/turkey-digital-nomad-visa

You would have to enquire as to how you could be paid, presumably through a Turkish company.

Check the UK residency rules. If you're just returning for two weeks and you don't work in the UK then there are no tax implications.

https://www.gov.uk/government/public...-test-srt-rdr3

I would contact Sue B

https://forums.contractoruk.com/acco...ief-guide.html

[Bidi]

It's actually pretty clear if you read the RDR3 guidelines from HMRC.

Thank you, I'll definitely have a look at the guidelines.

I would advise deciding on where you spend most of your time and register your business/employment there, but be careful in the other country. If you will be working in both countries you could split the income; there are companies that could advise on this. Bear in mind that remote working is now normal so the tax authorities might decide to look more carefully at anyone spending a lot of time in their country,

This is what I was having some difficulty understanding. Assuming I did get a visa to allow me to live and work in Turkey and I did just that. So say I only returned to the UK for a couple of weeks in the year. Would the UK still consider me as a tax resident?.

I would advise deciding on where you spend most of your time and register your business/employment there..

Just to clarify, are you saying I should open my limited company in Turkey if that's where I intend to live?. I did read the following online with regards to a British citizen working for a US organization not living in the UK or US:

"Make sure the US company is paying you as a contractor, not through their payroll system where they take US taxes out. "

So this had me thinking. In the UK to work as a contractor I would need to open up a limited company and have the organization I am working for pay money into that limited company where I would then be taxed through. If I was working for a US organization as a contractor, would it work the same way?. Meaning, would I need to open up a limited company here in the UK and have the US pay into that limited company?. If so, it may make it difficult to not be taxed in the UK. I guess what you said above would answer this question if I've understood correctly.

Bear in mind that remote working is now normal so the tax authorities might decide to look more carefully at anyone spending a lot of time in their country,

Yes I've noticed many European countries are starting/started to introduce digital nomad visas. I'm guessing having one of these visas means your being taxed by that country.

[BlasterBates]

Strictly, you should be registering your business/employment in the country where you work. However if you're just going to be in Turkey for a few weeks in a hotel no-one will notice. If you don't register your business/employment in Turkey and you are returning to the UK, and satisfy the UK residency requirements then this will be a UK business, simply because you will have no proof of registering and paying tax in Turkey. Just being in Turkey won't be enough, HMRC will want to see proof of tax being paid. However if you leave the UK and spend most of your time in Turkey, you will be resident there and at some point you shouldn't be surprised if the Turkish tax authorities take an interest. If they do then you'll be in hot water unless you can prove you were working in the UK or US.

I would advise deciding on where you spend most of your time and register your business/employment there, but be careful in the other country. If you will be working in both countries you could split the income; there are companies that could advise on this. Bear in mind that remote working is now normal so the tax authorities might decide to look more carefully at anyone spending a lot of time in their country,

[Fred Bloggs]

It's actually pretty clear if you read the RDR3 guidelines from HMRC. There are the statutory residency tests that determine whether you are a tax resident or not in the UK. It is extremely easy to be tax resident in the UK and Turkey at the same time. There are a number of worked examples in RDR3 guidelines and you are likely to be similar to one of them. Also look carefully at what's called split year treatment for the year you leave and return to the UK.

Then look to see if there is a dual tax treaty in place which will determine who gets first dibs on what money.

[NotAllThere]

Will the UK tax me if I am technically not living in the country?

You can live in Turkey but nonetheless be tax resident in the UK (and Turkey). The rules are available on the HMRC website. I suggest you search for them.

[cojak]

The Turkish tax authorities will probably have something to say about this arrangement however.

[Bidi]

I am a British citizen. I'm thinking about taking up a job for a US company. I'd like to work remotely from Turkey. Will the UK tax me if I am technically not living in the country?. Also, am I correct to say that the US will not tax me either as I am not a US citizen nor am I living in the US?. Thanks in advance.