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

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.

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

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

Learning Objectives

After completing this course, you will be able to:

• Determine employee v. contractor status.

• Identify when permanent residence is established.

• Recognize the impact of taxpayers working remotely.

• Discern what constitutes a permanent establishment.

• Ascertain various withholding requirements.

• Comply with various US reporting requirements

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite:

  Three years + business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules, supervising other preparers/accountants. Specific knowledge and understanding of working abroad, employee. Contractor, permanent establishments, tax homes and residency, tax withholding, and foreign tax exclusions; familiarity with pension distributions, FDAP, and totalization agreements.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).