Working Abroad (tax liablility related)

[*john_78*]

Thanks guys for posting your thoughts.. Makes me wonder why I took up this gig in the first place.. but having been benched for 4 months, thought I'll take a chance... Hopefully this exp. will help me negotiate my next adventure better..!

Looks to me its Lux tax. I'll need to pay.. Thanks Chef, will try calling your German accountant and see what he has to say.. about the german tax..

Now seriously thinking if I can talk to the ageny and see if I can get out of the contract - to stay withing the 183 day rule..

One last question guys,

(At present I am paying UK tax. Hope this is fine if staying < than 183 days in the tax yr, and getting paid throught a brolly/management company in the UK)

If I exceed the 183 days rule (6 months contract approx.), I assume my tax liablity switches from the UK to Luxembourg. Assuming my contract is for 10 months - Can i pay first 6 months UK tax. and the remainder Luxembourg tax?

[ace00]

(At present I am paying UK tax. Hope this is fine if staying < than 183 days in the tax yr, and getting paid throught a brolly/management company in the UK)

If I exceed the 183 days rule (6 months contract approx.), I assume my tax liablity switches from the UK to Luxembourg. Assuming my contract is for 10 months - Can i pay first 6 months UK tax. and the remainder Luxembourg tax?

I don't think you can pick & choose tax jurisdiction in that manner.
I have similar concerns in the end I decided to field every question to the Umbrella and let them tell me. Only obeying orders etc...

[ASB]

It doesn't switch as such. It is perfectly possibly to be tax resident in multiple jurisdictions at once. You could be liable in Germany, Luxembourg and the UK. [In fact you are almost certain to still be tax resident in the UK]. You are likely to be tax resident in Germany from the apartment. And you could be be tax resident in Lux.

But, as has been pointed out what you actually pay is entirely dependant upon your specific circumstances and potentially the DTA's between all the countries involved.

In general however you won't pay MORE than the highest taxing country in there, indeed you may well pay less. This depends upon whether the agreements in force covering your specific class of income are offset (tax in one place only) or credit (effectively joint taxing rights; home country gives credit for foreign tax paid).

Another thing you need to consider is social security. It may well be the case that it is beneficial for you to opt to continue to pay UK NI (this is possible for a period of time and may well be cheaper than any of the other NI you could be asked to pay).

Your situation is specific to you and the principles have been put forward, problem is finding somebody who can tie it all up. It's complex. For some light reading you should be able to find all the relevant DTA's on HMRC website to at least start sorting out the UK end.

[BlasterBates]

Thanks guys for posting your thoughts.. Makes me wonder why I took up this gig in the first place.. but having been benched for 4 months, thought I'll take a chance... Hopefully this exp. will help me negotiate my next adventure better..!

Looks to me its Lux tax. I'll need to pay.. Thanks Chef, will try calling your German accountant and see what he has to say.. about the german tax..

Now seriously thinking if I can talk to the ageny and see if I can get out of the contract - to stay withing the 183 day rule..

One last question guys,

(At present I am paying UK tax. Hope this is fine if staying < than 183 days in the tax yr, and getting paid throught a brolly/management company in the UK)

If I exceed the 183 days rule (6 months contract approx.), I assume my tax liablity switches from the UK to Luxembourg. Assuming my contract is for 10 months - Can i pay first 6 months UK tax. and the remainder Luxembourg tax?

There will be no problem, fortunately you are an employee so any of this that is taxed will be exempt else where. This is a general principle followed by all EU countries and Switzeralnd. You do however have to be careful as your documentation will always be in the "wrong language" this means you have to be very clear indeed about what your income is and how it is derived otherwise they'll use "credits" and tax twice, which is the "default mode". There is also a principle that you pay NI only once, and you can probably arrange a contract where a very small proportion of your work is done in the UK and pay UK NI. All you need is a UK contract by your management co, and wave the appropriate documentation at the Lux authorities. Tax, NI certificates etc are never questioned they are accepted as bonafide. They communicate with one another to check if necessary, it would never go further than that, such as "were you really working in the UK blah blah". Strictly speaking you should go back to the UK so keep at least 3 plane tickets.