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Tax Consequences of Working Remotely Abroad: VISAs, Data Security, Permanent Establishment, Employee vs. Contractor

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Tuesday, November 29, 2022

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This webinar will address the tax consequences of employees working overseas remotely. The panelist will outline work status and VISA considerations, address data security concerns, and recommend employer policies that all businesses should have in place. The panelist will point out proactive considerations, including how specific countries and U.S. income tax treaties define tax home and permanent establishment and how employee vs. contractor status affects filing and tax obligations for the employer and employee.

Description

Working remotely abroad is fast becoming a topic that all companies must address. Advances in technology offer practical ways employees can be productive without being in the office. Employees are insisting on greater flexibility and combining work with extended vacations, becoming digital nomads. Wikipedia defines digital nomads as "people who live in a nomadic way while working remotely using technology and the internet. Some digital nomads are perpetual travelers, while others are only nomadic for a short period of time."

Working abroad for short-term or lengthy stays creates a number of issues for both the employer and employee that are best addressed upfront. Employees may be subject to tax withholding, and employers could be obligated to withhold taxes in other countries. Having a physical establishment (PE) triggers withholding requirements in many countries.

Often overlooked, employers with a PE could be subject to VAT or GST taxes in the host country. Employees and employers must consider the appropriate type of VISA and the stipulations under each. Employees must realize that their U.S. filing obligations continue and often expand with extended stays abroad. Employers need policies that include limits on employee practices, time spent in particular countries, and countries that are off-limits.

Individual taxpayers and businesses can reap the benefits of employees being able to work remotely abroad. To do so, both must understand the legal, filing, and treaty issues of both the U.S. and the host country.

Listen as Christine Sielicki, EA, Tax Manager at Plante Moran, explains tax considerations for businesses and individuals working remotely abroad.

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Outline

  1. Work status and VISAs
  2. Permanent residence
  3. Employee vs. contractor status
  4. Nonresident withholding
  5. Social Security
  6. Additional business considerations
    1. Transfer pricing
    2. Policies
    3. Data security
  7. Additional individual considerations
    1. U.S. reporting requirements
      1. Form 1040 or 1040NR
      2. Exclusions and credits
      3. FBAR and other filing requirements
    2. Retirement plans

Benefits

The panelist will cover these and other key issues:

  • Determining employee vs. contractor status in specific countries and its affect on taxation
  • Caveats of certain VISA types
  • Data security considerations when working abroad
  • How a PE affects taxation in other countries

Faculty

Sielicki, Christine
Christine Sielicki, EA
Tax Manager
Plante Moran

Ms. Sielicki is a manager within the Global Mobility team. She has over 15 years of experience in personal taxation and...  |  Read More

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