Tax Away from UK

[Sapper]

Okay,..there I was merrily going along,....looking for effective ways to shelter my hard earned money,..and I come across this site and end up being even more confused.

Hypothetically speaking,..imagine that:
1. I have a UK company and it has been trading for several years.
2. Standard Ltd company as used by contractors.
3. All contracts I have had have been with UK Agencies
4. I have travelled extensively for all the contracts.
5. In some cases, I have spent more than 6 months in another country other than the UK.
6. MY wife and children have now settled outside of the UK and so I try to get contracts in Germany where they live. But ALWAYS through a UK agency.

My money is only ever remitted to a UK account from a UK company (agency) to my UK company. I have no bank accounts outside the UK. But I am now spending a lot more time outside the UK.

So, my questions are as follows:

If I have a 7 month contract in France,..and stay there (even on most w/ends), do I need to pay tax in France?

If that contract is followed up by a contract in Germany for 7 months,..do I then need to pay in Germany?

What if the contract is with the same company,..but I am doing site deployments and I spend 7 months at one site then 7 months at another.

Just because my family live in Germany,..does that mean I am obliged to move my company etc over to Germany even though my next contract location is never guranteed? It's likely to be in the UK.

It does not seem to make sense to me that I need to keep changing who I pay tax to. When I spoke to a TAX adviser,..he said,.."Keep paying in the UK,..your business is registered there,..you are paid by a company that is in the UK,..your bank accounts are in the UK,..it's just by chance that your contract is in Germany". But it seems that this was not correct although seems to be the most sensible.

Any help,..or a very good accountant/international Tax Advisor recommendation would be very much appreciated. At the moment,..am in France so anyone with French Tax Law would be great.

[Daywalker]

I sent you a private message sapper.

[tim123]

sapper,

The general rule is that you should pay personal tax in the country that you are physically resident. Your company may pay taxes in the UK, but the salary and dividends that it remunerates you with, are taxable in the country that you are actually working in. Yep, it doesn't make sense for you to keep on chopping and changing tax juristrictions, but it does makes sense for the particular country's revenues.

One final thing is that, as the controlling director of the company, that too can be deemed to be resident in the country that you are working in and hence taxable there.

You can, of course, contine to work as you are using the 'getting away with it' tax rule. Lots do, but some get caught.

HTH

tim

[expat]

The general rule, as I understand it, is that you should pay income tax in the country or countries where you are resident, AND in the country or countries where you earn the money.

Normally you can expect to have tax paid in one country credited against tax due in another (theoretically): for ewample if you are resident in the UK and earn money in France, then you will be liable to pay French tax on the income earned in France; and UK tax on all income earned anywhere, but with a credit for the tax you have paid in France.

Note that it is not normally you who get to decide where you are resident, or where income is earned (for example, if you say that because you bill for your French work via a UK Ltd Co in pounds, it is earned in the UK, the French taxman will not have any of it).

[BlasterBates]

If you have a Ltd an operate in Germany, you must register it after 6 months with the tax authorities.

With regards credit, just to clarify what that means. You don't pay the difference between the tax rates, but what it means is if you earn in the UK but you are resident in the Germany, the money earnt in the UK will be used to calculate the marginal rate of tax should you have any additional earnings in Germany, the same applies in France; for example French people resident in France but working in Luxembourg paid Luxembourg rates of tax not French rates, but should they have earnt additionally in France they would then pay a higher rate of tax, on French earnings.

[freshblue]

Albany are ok but not cheap!