A cosmopolitan culture, no shortage of opportunities to catch some rays on the beach and a strong, high-income economy help to explain why Australia remains such an alluring destination for contractors, despite its comparatively high tax rates. But what else do you need to know if you wish to work Down Under with a little assistance from our own contractor advisors in Australia?
It’s certainly quite the lifestyle choice…
Whatever you could possibly desire from a place to work on a contract basis, it seems that Australia offers (almost) everything.
If a period of time spent living and working in this part of the world has long been on your bucket list, you can expect the opportunity to experience all of the rugged Outback rock formations, urban charms and captivating wildlife that you have long associated with Australian life.
So, what steps are necessary to secure the right to work here?
Before you will be able to start a contract in Australia, you must ensure you have the relevant work rights. Detailed information about visas can be found on the Department of Home Affairs website at www.homeaffairs.gov.au.
The 457 visa was once the most common visa for Australian or overseas employers wishing to sponsor skilled workers from abroad to work temporarily in the country.
Known in full as the Temporary Work (Skilled) visa (subclass 457), it was introduced shortly after John Howard became Prime Minister in 1996, but was abolished in 2018 by then-Prime Minister Malcolm Turnbull, and partially replaced by a new Temporary Skill Shortage (TSS) visa.
Finally, that tax…
One of the main reasons you are likely to approach our contractor advisors in Australia here at Link Global Management is the unparalleled assistance they can give to ensure you always stay on the right side of the country’s tax law.
The Australian tax year runs from July 1 until June 30. Tax rates can be as high as 45%, with each person and company being required to lodge a tax return each year.
Individuals in Australia are able to claim a range of tax allowances, however, the most common being Living Away From Home Allowance, or LAFHA. This is principally made up of two components covering food and accommodation during your time living away from your normal place of residence.
The key deduction to be aware of, meanwhile, is superannuation. This is essentially your pension fund, and is about a tenth of your rate or salary paid into a chosen fund. If you will only be spending a short period of time as a worker in Australia, you are entitled to withdraw an accrued superannuation amount upon departure. Bear in mind, though, that tax is levied on your superannuation contributions both on their way into and out of your fund.
Do you have any other questions about what you can expect as a contractor in this diverse, fascinating and rewarding country? If so, our contractor advisors in Australia here at Link Global Management are always available to provide suitably tailored guidance.
Have you ever wondered what it would be like to work as an independent professional in the country that is not only the geographically largest sovereign state in the Middle East and the second-largest in the Arab world, but also the birthplace and centre of Islam?
With its domestic and business culture that places such a strong emphasis on religious life, there is no doubt that Saudi Arabia offers an experience quite unlike anywhere else for contractors. So, what are some of the factors that you should be mindful of before seeking work here?
The role of Islam in Saudi Arabian life
It would be quite the understatement to say that in Saudi Arabia, religion – specifically, Islam – is the underlying principle in all aspects of life. In a country where the typically Western practice of strict division between religion and other areas of life is absent, Allah and his Prophet are everywhere – even in business meetings.
It is therefore crucial for non-Muslim contractors looking to work with an umbrella company in Saudi Arabia to become well-versed in Muslim philosophies and tenets, so fundamentally do these relate to the daily lives of the population.
While, as a foreign contractor, you would be granted freedom of religion in Saudi Arabia, no religious practices other than Islam are permitted, and proselytising is illegal.
What is the current economic picture in Saudi Arabia?
While the Saudi government’s ‘Saudization’ policy of recent years – placing an emphasis on the greater employment of Saudi nationals – has impacted on the opportunities open to overseas workers in the country, there are still over 10 million foreigners living in the Desert Kingdom, with about 125,000 of them estimated to be workers from Western countries.
It is very rare, however, and almost impossible, for foreigners to come to Saudi Arabia and only begin looking for work on arrival; indeed, you will not be able to secure a work permit in the country without a concrete employment offer.
As an expat worker in the kingdom, you will have a sponsor – usually your employer – who will act as both a guardian and guarantor during your time working in the country. You cannot apply for a Saudi Arabia work permit yourself; instead, your sponsor must apply for one on your behalf.
Despite the ‘Saudization’ push, plenty of opportunities do continue to exist in Saudi Arabia for foreign workers with a high level of experience and expertise in such fields as engineering, IT, healthcare, medicine, telecommunications and construction.
Are you seeking out the ideal umbrella company in Saudi Arabia?
Whatever the sector in which you aspire to contract in the Arabian Peninsula, we can serve as your invaluable partners here at Link Global Management. We will engage you on our payroll so that such matters as your salary and tax obligations will be appropriately and efficiently dealt with for the entirety of your time in the country.
Enquire today to our advisors, and we’ll work closely with you to ensure all of your professional arrangements are in good shape for your contracting career in this fascinating part of the world.
Norway has long been a highly desirable contracting destination, on account of such factors as its highly developed and stable economy, a strong social security system and some of the highest standards of living in the world.
However, there are also certain complexities about life as a contractor in this part of the world for which you may need to turn to our contracting advisors in Norway for assistance and guidance.
Will you need a visa to work in Norway?
If you are a national of a country within the European Economic Area (EEA), you will be able to work in Norway without having to seek a visa. You will probably require a visa, however, if you are a national of a non-EEA country.
An EEA national with a valid identity card or passport is able to legally reside and work in the country without a visa for three months, and is only required to register in Norway if they intend to work and stay there for more than three months.
An exemption also applies for six months for skilled workers. As for if you are an expat from outside the EEA, the exact process that you will have to go through will depend on the kind of work that you wish to do.
What tax system can you expect?
If you choose to become a regular employee of an employment solutions provider – which operates much like an umbrella company would in the UK, being a fully registered and compliant Norwegian business – you can expect your taxes to be deducted at source via the service provider’s payroll.
Indeed, if you are familiar with the UK tax system, its Norwegian counterpart is similarly structured, but with different rates. The combined municipal and state taxes, for instance, can be regarded as equivalent to Pay As You Earn (PAYE) income tax, while other social security taxes levied in the country are essentially the Norwegian version of National Insurance Contributions (NICs).
However, even for contractors from the UK, the Norwegian tax system can be tricky to get to grips with, not least given the very dated and complicated nature of the tax treaties between Norway and the UK.
We can tell you the ‘lie of the land’
Whichever country you are coming from when you are looking to contract in Norway, it’s well worth engaging the services of our contracting advisors in Norway here at Link Global Management, so that you don’t put a single foot wrong during your time in the country.
We can put your mind at rest when you are seeking to minimize your tax liabilities as a contractor in Norway, while remaining fully compliant with the law.
Simply enquire to our team today, and we’ll help you to immediately start making the most of your life contracting in this highly socially and financially rewarding corner of Scandinavia.
Turkey has long been a location of prime importance as the gateway between the West and central Asia; indeed, Turkish contractors are well-represented in these regions. If, meanwhile, you are a contractor from outside Turkey with an interest in working in the country, you are likely to find a particular abundance of opportunities being offered on major infrastructure work.
However, it is also true that it isn’t always straightforward to work as an independent contractor in Turkey, with various legalities relating to immigration, tax and admin work needing to be navigated.
How easy is it to secure contracting opportunities here?
As aforementioned, Turkey offers a good number of jobs for overseas contractors, especially with regard to construction and engineering. However, one of the most potentially onerous requirements is that of generally needing an employer sponsor if you are to secure the appropriate work permit and work visa for the country.
It’s sometimes difficult for independent workers to find clients that are willing to sponsor them, and even if they accomplish this, a new sponsor is needed each time the worker decides to take on a new contract. This can quickly cause paperwork to accumulate.
You also need to be aware of the local tax situation
Putting aside the matter of securing sponsorship from an employer, one of the other tricky aspects of life as a contractor in Turkey is ensuring compliance with the country’s intricate tax system.
You may still need to pay tax in your home country alongside that payable in Turkey, so you should make yourself aware of both Turkey’s tax laws and the legislation applicable in your home country in relation to overseas earnings.
Working on a permanent contract in the country is often preferable, as many companies employing you on this basis will handle your tax under the PAYE (pay-as-you-earn) system, thereby saving you from having to lodge a tax return yourself.
Allow us to lessen your worries as your payroll vendor in Turkey
The great news is that when you turn to Link Global Management, we can engage you on our payroll so that your income is paid by us in the form of a salary, allowances and expenses, and your tax and social security deducted at source on a PAYE basis. You’ll therefore be able to rest easy in the knowledge that payments will be made to the relevant authorities on your behalf.
We are far from just a basic payroll vendor in Turkey, also working in accordance with your personal circumstances and Turkish law to minimise your tax and social security liabilities where possible.
Don’t make serious mistakes while contracting in Turkey that could cost you a lot of money or even have serious legal repercussions. Instead, call upon our payroll services for Turkey contractors, making the most of our impeccable specialised knowledge and more than two decades’ experience of assisting international contractors like you to make the most of their lives and earnings.
It shouldn’t be too surprising that Denmark is one of the most sought-after destinations among independent professionals looking for contracting opportunities overseas. It is, after all, renowned as one of the world’s most economically and socially developed countries, characterised by high standards of living, civil liberties, democratic governance, prosperity and human development.
But what else do you need to know about contracting in this in-demand corner of Scandinavia?
How easy is it to secure contracting jobs here?
The continued growth of the Danish economy, and the associated upswing in employment, means you may well find a wide range of opportunities to contract in this part of the world.
A particular strength is sustainable energy, the country having set a world record for sustainable energy usage due to a remarkable 43.4% of its energy coming from wind turbines in 2017. The government has committed to building on this success by setting a target of generating half of its energy from green sources – and contractors could play an instrumental role in making it happen.
Moreover, with the Danish Chamber of Commerce having warned that a dearth of talent could act as a drag on Denmark’s growth rate compared to other European locations, Prime Minister Lars Løkke Rasmussen has signalled that he wishes to “continue to hold Denmark open for foreign talent”.
Indeed, with about a tenth of the Danish population being immigrants or descendants of immigrants, the country already boasts a cosmopolitanism that you may appreciate as a contractor from abroad.
What is the local tax situation?
You will become tax resident as a worker in Denmark if you have a permanent residence and a qualifying stay in the country, or if you spend more than six months there. Even if you are not tax resident, however, you will be taxable in the country on any income earned or generated there.
Denmark has a progressive tax rate of up to 56%, including state taxes, health and other taxes. However, a special tax regime exists for expatriates, with a flat tax rate of 32.84% payable – including 8% labour market contributions – subject to certain conditions.
Those who live and work in Denmark for less than six months (183 days) are only required to pay tax on their Danish-sourced income. Staying in Denmark for longer than this, however, necessitates you paying income tax on all of your income around the world, although you are advised to first check the double tax treaties between Denmark and your home country.
How can Link Global Management make life as a contractor in Denmark easier?
With so much to be learned about the legalities of contracting in Denmark, as well as how you can minimise your tax liabilities and simply lessen your stress as an independent professional in this highly rewarding country, Link Global Management can be instrumental in enabling you to make a smooth transition to your new working life here.
Are you all sick of hearing about Brexit yet? Yes, we’re afraid we do have to mention it again, lest there be any assumptions that it has effectively ‘gone away’ as an issue since the UK and the EU agreed in April to extend the Article 50 process until 31st October.
That news meant the UK did not end up leaving the EU without any deal at all, as would have been a legal reality otherwise. There is still, of course, a risk of that coming to pass later in the year.
But in the meantime, what do British contractors seeking out a payroll vendor in Belgium, France, Germany or another EU country need to be aware of when it comes to the likely impact of Brexit on their overseas work?
For now, it’s still ‘business as usual’ for Brits contracting abroad
The extension of the Article 50 process means that from now until the autumn, normal life carries on for UK contractors working in the EU, due to Britain’s continuing membership of the European Union. But even if the country does find itself in a ‘no-deal’ Brexit situation later this year, certain aspects of contracting in the EU as a Briton aren’t expected to change much.
One of those factors is tax, which is thought highly unlikely to go up for such contractors, given that they should still be taxed at the level of the country in which they are working.
The situation with ‘double taxation’ – the phenomenon of finding oneself subject to paying tax in two countries at the same time – is slightly less certain. The UK presently holds a double taxation treaty with each member state of the EU, but also with the majority of countries outside the EU. This means contractors shouldn’t expect too much to change in this regard, whatever occurs with Brexit.
But there could still be some greater barriers
Will it remain as easy as it is now for British independent workers to acquire contracts in the EU post-Brexit? This will depend hugely on whether freedom of movement and freedom of work carry on post-Brexit, which – amid ongoing negotiations in the UK between the ruling Conservative and opposition Labour parties – is amazingly yet to be determined.
If the right to freedom of movement within the EU ceases for British contractors, it is likely that they will require work visas to keep on operating in the EU. This could bring some practical and financial complications, not least the need for a company to sponsor the visa and then employ the contractor.
Should this come to pass, it may hamper the financial viability of Britons contracting in the EU. But again, much uncertainty still prevails as to exactly what conditions could be expected after Brexit, especially given the House of Commons’ repeated rejection of the Withdrawal Agreement previously reached between the UK and the EU.
Talk to our team about how we can address your concerns
So, if you are a British contractor seeking out the services of a payroll vendor in Belgium, Holland, Spain or elsewhere in the EU, the current situation can be described as ‘as you were’.
Nonetheless, as the Brexit saga continues to evolve, we can continue to advise you here at Link Global Management, including by proposing the solutions that will enable you to make the most of your life as an international contractor long after Brexit.
One of the very first decisions that any contractor is required to make in their career is whether to form a limited company or join an umbrella company. Particularly if you are an inexperienced contractor, your agency may have pushed you towards the umbrella option without you ever really knowing what an umbrella company is.
In short, umbrella companies enable contractors to combine the flexibility of contracting with the rights and benefits that permanent employees enjoy. That’s because if you join such a company, you will be given an employment contract that renders you an employee of the business.
So, what if you start contracting abroad?
Similarly, when you are looking to contract overseas, you may spend a lot of time contemplating whether it would be best to set up your own local limited company while you are working in a particular country, or instead go down the umbrella company route.
A local limited company may make a certain amount of sense if you intend to live in the given country for a long time, although you should also check the regulations in that jurisdiction. There are certain costs and paperwork associated with setting up a local limited company, and you’ll require a local accountant.
An international umbrella company, though, could enable a somewhat swifter and simpler transition to working abroad. The term ‘umbrella company’ is particularly common in the UK, with such companies typically being referred to by different terms elsewhere – for example, payroll companies in the United States and salary packaging companies in Australia.
The right umbrella company could take much of the stress out of your overseas work
As exciting as contracting abroad can be – particularly the chance to experience a new and unfamiliar culture – it isn’t as simple a process as just accepting an assignment, arranging a flight and getting your bags packed.
With different countries often having very different tax laws, you may become confused by such matters as where and to whom you must pay tax, how you will be paid and whether you may be subject to ‘double taxation’ – the phenomenon of having tax levied on your income in both your home country and the one in which you are contracting.
That’s why, for assistance in relation to such things as the paperwork that you will require if you are to work in a given jurisdiction, local tax regulations and even the arrangement of insurance, you may find an umbrella company’s services invaluable.
While there are naturally fees involved when working with an umbrella company, tax savings may also be possible that make such a partnership worthwhile in and of itself.
Are you seeking the complete umbrella company in Spain, France, Germany, Turkey, Saudi Arabia or elsewhere in the world as an international contractor? If so, Link Global Management would be delighted to hear from you and to discuss how we can serve your specific needs.
Do UK independent professionals need to worry about IR35 when contracting abroad?
The short answer to this question is: yes, even when contracting in another country, the IR35 legislation may still affect you as an independent professional from the UK.
The fact remains that as long as you remain liable for the payment of tax in the UK, than you may be subject to an IR35 reassessment of whether you were a genuine contractor of a given foreign company, or instead one of its employees.
Only after a full year abroad will you finally cease to be tax-liable on earned income in the UK.
Be mindful of your tax obligations while overseas
Once you are no longer liable to pay tax in the UK, you won’t need to concern yourself with IR35. However, you will need to be well-versed in the rules that apply in the country you are now working in – not least because while some foreign countries have quite favorable tax regimes for contractors, you may be subject to harsh conditions in others.
Indeed, the same general principles need to be borne in mind when you are assessing your likely tax liability in a country outside the UK. Was a given contract project-based, for instance? Was there mutuality of obligation, meaning you had to turn up and do as you were asked to do by the end-client? Were you operating your own business? Did the end-client also give you work under all circumstances?
IR35 can follow you even into another country
If Her Majesty’s Revenue and Customs (HMRC) wishes to prove that you come under the terms of IR35, it will follow the same procedure as it would if you were based in the UK.
This means it will seek to obtain a copy of what is known as the ‘upper’ contract – the contract between the end-client and the agency you worked for – and compare it to the ‘lower’ contract, which is the contract you had with the agency.
If the upper contract closely resembles an employment contract, you can expect an IR35 investigation to begin in earnest.
Whether HMRC can easily obtain such contracts – given that it has no jurisdiction outside the UK – is a different matter, especially given that different countries’ tax authorities don’t tend to be greatly cooperative with each other.
However, you shouldn’t depend on HMRC encountering such difficulties as a form of ‘protection’ against IR35 investigation. If HMRC does secure the documents it seeks, you could have problems, so it’s best to ensure your contracts abroad address the IR35 issue as effectively as your UK contracts would.
You will no longer have to pay taxes on earned income in the UK once you have been working abroad for a full year. Nonetheless, from this point you will be subject to the tax laws in the country where you are now living and working.
Why not consult the Global Link Management team today for advice and guidance in relation to your efforts to ensure international tax compliance? We are all about helping to take the hassle out of contracting overseas, and can assist in reducing your confusion and tax liability while ensuring that you remain entirely tax compliant.
The international contracting market can understandably be a very tempting one – after all, there are always reports of rates escalating in certain parts of the world due to local skills shortages, and you might well fancy getting in on that action.
However, the process of becoming a contractor overseas isn’t quite as simple as heading to an online jobs board for the country or jurisdiction you have in mind, and applying for the most attractive opportunities. For one thing, before you do this, you may need to secure a visa that entitles you to work in the country in question. Agencies may refuse to work with you until you have one.
Then, there is the tax situation – for example, are you prepared to potentially end up paying tax in both your new country and your original place of residence? It’s just one more factor that shows why you need to seek out professional advice on contracting overseas before making such a big move.
The situation can differ greatly between possible destinations
For an example of how profoundly your experience of contracting abroad can be impacted by the specific country in which you choose to contract, you might consider the difference between contracting inside and outside the EU if you are currently an EU resident.
If this is your own status, you won’t need any visas or permits in order to take advantage of contracting opportunities in other EU member states. However, currency and tax differences between your country of origin and contracting destination could still greatly influence how much take-home pay you are likely to enjoy.
As for if you do not reside in an EU member state, some kind of visa will be necessary to contract within the EU. Nonetheless, the precise processes and opportunities available can differ considerably from one country to the next, so you should do your research before applying.
What else should prospective overseas contractors know?
There are various other ways of easing your transition into foreign contracting markets – such as working with an umbrella company, which could give you assistance with a wide range of matters, like the relevant taxation, paperwork and insurance requirements.
Local tax laws can also hugely vary between countries, of course, which is why it is a key subject you should bring up when requesting advice on contracting overseas. If you are currently a UK resident and are considering contracting abroad, you’ll need to determine how your new working arrangements will affect your status for tax purposes.
If you establish that you are not a resident of the UK – which is a legal concept overseen by Her Majesty’s Revenue and Customs (HMRC), and differs from simply physically being in the country – then you will be exempt from paying UK taxes.
Are there any other aspects of working as a contractor abroad that you are unsure about? If so, the team here at Link Global Management would be happy to answer your questions and put your mind at rest; simply call us now on +44 (0) 1263 513009, or use our straightforward online contact form.
Holland is one of the most popular contract locations in Europe. The Dutch Contracting market has been virtually immune from the effects of the global economic downturn, and the market is always buoyant.
The Netherlands has a central role as the ‘Gateway to Europe’, with the port of Rotterdam, Europe’s largest port and fourth largest worldwide, and Amsterdam Schiphol Airport, a major European airfreight and passenger hub. It has a vibrant IT contract market, particularly in the banking and insurance sectors.
Our local knowledge and expertise can help you navigate through the system. The Dutch system of taxation and social security is complex and rather strict, and rates of tax and social security to be paid can be high.
The most important points to consider while contracting in the Netherlands:
- As an EU/EEA citizen you can, for the most part, contract in Holland without the need for a work permit
- Contracting in Holland must be an employed structure unless you have a Netherlands Ltd Company
- Taxation in the Netherlands is strict, and it’s essential to remember the 30% ruling. The 30% reimbursement ruling (better known as the 30% ruling) is a tax advantage for highly skilled migrants moving to the Netherlands for a specific employment role. When the necessary conditions are met, the employer can grant a tax free allowance equivalent to 30% of the gross salary subject to Dutch payroll tax. It could sound complicated but is very simple once you know it.
All citizens must register with their local town hall office upon entry into the Netherlands if they plan on staying in the country for more than, on average, 4 months (this period can change from city to city).
Citizens of the EU/EEA who wish to stay in the Netherlands for more than 3 months must also register with the Immigration and Naturalisation Department (IND). The department will stamp your passport as proof that you have registered and the stamp is then valid throughout your passport.
With these registrations done, there is a choice to be made based on your contract duration and intentions: between a SoFi number and a BSN number. These numbers fulfil the same function (in many ways they can be considered equivalent to a UK National Insurance number) but differ in the implications that they entail.
Self-Employment Registration in the Netherlands
If this is the right type of engagement for you (please note there are very strict rules in the Netherlands regarding self-employment). You must choose a unique name or trade name for your business and have it registered with the Dutch Chamber of Commerce (Kamer van Koophandel or KvK). To book an appointment, you must first complete a registration form.
Most freelancers and sole traders opt for an unincorporated business structure and are typically referred to as ZZP’ers (zelfstandige zonder personeel or self-employed without staff).
Once your registration is approved, you will be given a company registration number, which you must use on all invoices and business correspondence. You can also get your VAT number (locally referred to as BTW) when completing the business registration; your tax registration with the Dutch Tax Authorities must also be completed at this point.
Health Insurance and Social Security Benefits
As a general rule, every person living and working in the Netherlands must contribute to the Dutch social security system. This will be done through the local payroll, and your Link contact will be able to provide you with more details.
Health insurance is also compulsory, but this is not covered under the social security system so you will need to also look into taking out Dutch public health insurance separately – this must be done within four months of arriving in the country. Health insurance covers most healthcare services from GPs and hospitals and health insurance companies (there are more than 150 private and public companies) have to offer the same basic policy to everyone. Have a chat with Link to discuss this matter and find out more about the health insurance company they work with.
Taxation in the Netherlands
The Dutch tax year is the calendar year, and tax returns must be filed by April 1st of the following year. Tax rates are banded between 33% and 52% dependant on income, but this is tempered by the 30% ruling. There is an expatriate scheme that allows foreign employees to be paid a tax-free allowance of up to 30% of the gross salary provided specific criteria are met.
Allowable expenses for self-employed people
Depending on the circumstances, investment allowance, tax-deferred retirement reserve, self-employed persons’ allowance and allowance for research and development work may apply before taxes. Costs such as telephone, internet, mobile phone, business software, transport (taxi, train, plane etc.) and hotel, insurance premiums and training courses, are generally fully deductible. Entertainment expenses are only partially deductible.
The experts at Link Global Management are always happy to help, providing detailed advice and guidance through the process. Contact us on our website.