Reply to: Question for the economic types

[Freamon]

Other possibilities include putting some of it into Bunds, and using spreadbetting to hedge yourself against moves in the Euro/DK exchange rate.

[Mich the Tester]

I think if you're there more than 183 days you'll be taxed on your worldwide income anyway ,but like i say take advice, i did talk to a danish tax firm a while ago i'll try and find the link later.

I suppose I could arrange with them to spend max 182 days in baconland and additional days from time to time in another office, maybe in DE or NL.

[doodab]

will do, but also have English Ltd so I could theoretically pay myself a minimum wage in DK

I think if you're there more than 183 days you'll be taxed on your worldwide income anyway ,but like i say take advice, i did talk to a danish tax firm a while ago i'll try and find the link later.

[Mich the Tester]

I would take some proper advice on that, as unless NL and DK have a different tax treaty than the european norm you'll be tax resident in DK after 183 days and taxed on DK income in DK.

will do, but also have English Ltd so I could theoretically pay myself a minimum wage in DK

[doodab]

No, MyCo is in NL, so I'll pay NL taxes.

I would take some proper advice on that, as unless NL and DK have a different tax treaty than the european norm you'll be tax resident in DK after 183 days and taxed on DK income in DK.

[darmstadt]

+1

although I'm concerned of Scenario 4

Germany realise the best thing to do is to get out of the euro and leaves everyone else to it. But as you say you can offset that by keeping your euro account in a German bank (probably attached to a german forwarding address for safe measure).

I can provide you with one of those...

[Mich the Tester]

Indeed. Interest rates are (just) higher in Euroland and the German currency, whatever that will be, will always be strong.
For anyone interested in doing the same, you have to visit Germany to create an acoount there with passport and proof of address.
The big assumption that if the Euro is a dud, there will be a one-to-one exchange to the mark. Or will they exchange to the currency of your home address?

I'm not too worried about the German Euro vs the Dutch Euro; probably pretty much even on that, seeing as the two economies are intertwined (NL does most of the logistics for german export/import).

[Mich the Tester]

You'll be paying local taxes, which are high, plus most expenses will be in kroner. That will be more than half your contract value i expect so it makes sense to be paid in krone to minimize currency conversion costs and fx risks.

No, MyCo is in NL, so I'll pay NL taxes.

[sasguru]

Might be sensible regardless of what happens to stick more in the German account.

Indeed. Interest rates are (just) higher in Euroland and the German currency, whatever that will be, will always be strong.
For anyone interested in doing the same, you have to visit Germany to create an acoount there with passport and proof of address.
The big assumption that if the Euro is a dud, there will be a one-to-one exchange to the mark. Or will they exchange to the currency of your home address?

[DimPrawn]

Can they pay you in Gold?

Investors Chronicle - Video: Gold's long-term cycle

[doodab]

You'll be paying local taxes, which are high, plus most expenses will be in kroner. That will be more than half your contract value i expect so it makes sense to be paid in krone to minimize currency conversion costs and fx risks.

[Mich the Tester]

So hedging by converting 50% to euros in a german bank, and keeping 50% in kroner in danish bank.

Might be sensible regardless of what happens to stick more in the German account.

[DimPrawn]

Scenario 5. All of Europe join the pound and all us sensible people earning pounds become staggeringly rich and attractive to Euro ladies.

[eek]

Scenario 1: the PIIGS fall out of the Euro, Euro strengthens
Scenario 2: the Euro continues its crisis-ridden state, Euro declines but very long term
Scenario 3: Euro falls apart completely

1 and 2 are more likely.

Hedge your bets is what I would do: Create a Euro account in Germany and stash half your funds there, the rest in Kroner.
If 3 occurs, your Euro account in Germany will become a Deutche Mark account, I'm guessing

+1

although I'm concerned of Scenario 4

Germany realise the best thing to do is to get out of the euro and leaves everyone else to it. But as you say you can offset that by keeping your euro account in a German bank (probably attached to a german forwarding address for safe measure).

[Mich the Tester]

Scenario 1: the PIIGS fall out of the Euro, Euro strengthens
Scenario 2: the Euro continues its crisis-ridden state, Euro declines but very long term
Scenario 3: Euro falls apart completely

1 and 2 are more likely.

Hedge your bets is what I would do: Create a Euro account in Germany and stash half your funds there, the rest in Kroner.
If 3 occurs, your Euro account in Germany will become a Deutche Mark account, I'm guessing

Wow, sensible stuff for once. I guess I can also just use the ATM each week in Baconland and stick a load of kroner in a local account each week, then hope the collapse doesn't happen. Already have German account.