Caution to the Wind and to the Sun - Working from Abroad as an Independent Professional

The desire to take advantage of the ‘remote work’ policy that many of us have become accustomed to over the last year and a half has never been greater.
Many of us have become familiar with skipping the traffic whilst working from home, others have opted to work remotely from a foreign country for a variety of reasons, none more popular than improved climate.

It is worthwhile considering the impact that this decision may have before deciding to extend that short holiday.

Most countries have their own tax rules, making it increasingly important, that every independent professional has full visibility of where they are physically carrying out their work, and furthermore, of the tax rules surrounding the different tax jurisdictions that they operate in.
To provide as much context as physically possible, we have prepared a checklist that will assist you in making sure you have done all the necessary research before committing to any move.
We also strongly advise reaching out to your dedicated account manager before making any commitments to travel. Separate to that, you should also consider reviewing your contract to check if there are any conditions that exclude the possibility of working abroad.

Local Employment Laws & Visas

Firstly, you should check on the local employment laws and the requirement for visas if any.
Many countries will not require either the independent professional to register for taxes, dependent on the length of stay.
In contrast, other countries will require the employee and the employer to pay taxes from the first day of work carried out in said country.

If you reach out to a local tax advisor in the relevant country, they will advise on the potential liability if any, in said country, considering the individual circumstances including but not limited to length of stay and country of residence.
This may result in a requirement for the contractor to register for local taxes and pay an additional percentage of tax in the country they are operating from.

Time Zones

Many studies have shown that working remotely often leads to increased productivity, however, this increased productivity may be one person working more efficiently at the expense of other team members working less productively.

The impact that working from a different time zone has on an overall organisation is often overlooked in the ‘remote-working’ conversation between hiring client and independent professional. It is worth noting that this decision may not just have an impact on one team member’s productivity, it may have an adverse effect on the remaining team members who collaborate or contribute with their work. Will it affect clients and the level of service they currently receive?
Will working from a different time zone cause any difficulty to your client? Will the time zone allow for a normal working day or will it mean that you are working at night from your new location?

Company Culture

Even though many studies show remote working can increase engagement between a hiring client and an Independent Professional, it is yet to be seen whether such policies will have long term impacts on the company culture.

It is much harder for colleagues to build rapport online, not to mention the loss of organic collaboration between team members and socialising outside of working hours. There are new technologies and ways for companies that help build rapport and company culture within remote working practices, however, this is still more difficult to achieve and at this stage, deemed less effective than face-to-face interactions and engagement.

An inability to integrate with the company culture may have an impact on contract extensions and further opportunities, which is something that you should consider, especially if you have started a new engagement with a new hiring client.

Tax Residence & Payroll

If you want to work remotely from a different country, this will have an impact on your tax residence status.
The tax residency rules in Ireland are set at 183 days, however, in some cases, it may take some visitors longer to become a tax resident in Ireland.
The same can be said when moving from Ireland to a foreign country, your tax residence may change and you should be aware of this before the change happens so you can be confident in what happens next and remaining compliant at all times, should it occur.

There may be a requirement for your payroll to be moved to that country too. However, if you are a director of an Irish Limited Company, Revenue guidelines outline that your payroll should be processed through the Irish payroll system. You may have an additional tax to pay in the country where you are operating but if you are in luck, there may also be a 'tax treaty' in place between Ireland and said chosen country. This 'tax treaty' typically allows for any Income Tax paid elsewhere to be claimed back as part of the Income Tax Return to ensure that there is no double taxation in place.
 

As the world slowly but surely returns to a more normal working environment, there will undoubtedly be a case within every organisation where an independent professional does not want to return to the traditional workplace having benefited from the remote-working policy.

It would be unfair and unprofessional to make a general recommendation without considering individual scenarios or circumstances, however, one recommendation that remains consistent regardless of where you are considering working from, you should reach out to both your hiring client or agency and to your dedicated account manager within Icon Accounting who will be better positioned to advise on your specific scenario in more detail.

If you have any questions on how you can ensure that you remain compliant whilst working abroad, please feel free to reach out to our friendly team of experts by emailing info@iconaccounting.ie or by calling 01-8077106.