Contracting abroad? Think ahead!

John O'Hanlon
- Leadership - Apr 08, 2015

According to new research by CXC Global, the global employment market is littered with many surprising legislative quirks that could land contractors in seriously hot water. Michelle Reilly, CEO of the international contractor management specialist, outlines her favourites:

1. Want to work in Germany? Become an atheist – If a freelancer operating in Germany belongs to the Roman Catholic or Protestant communities – and declares their religion – then they will have to pay an amount equal to 8-9 percent of their income tax to support their particular church. Want to avoid this? Consider becoming an atheist!

2. Paying twice as much tax as your neighbour? – Switzerland is made up of 26 different cantons, or regions, each of which has different rules and regulations regarding employment. Even moving to a neighbouring street could therefore mean you’re exposed to a completely different system of complex tax law.

3. Enjoy a 14 month year in Spain – One of the most attractive factors of working in Spain, aside from the weather, is that professionals generally receive bonuses in July and at Christmas that equate to being paid an additional 13th and 14th months’ salary.

4. Enjoy an extended break in Brazil – Brazil is home to some very contractor-friendly taxation laws, not least that professionals are considered as non-residents for a total of 183 days, or six months, out of a 12-month period, regardless of whether these days run consecutively or not. However, following the completion of this period, contractors are expected to pay full taxes and manage the, often extremely complex, Brazilian labour laws.

5. Heading to Aruba? Take your partner – If you were to guess the country with the highest taxes, it’s unlikely you’d pick Aruba in the Caribbean. Professionals operating in the country who earn more than $171,149 are subject to income tax at 58.95 percent although this is reduced by 3 percent for married couples.

6. Don’t mess with the Swedish Tax Agency… – Sweden is definitely not a place you want to be a non-compliant contractor. The Swedish Tax Agency has more powers than the police in many ways and can enter a home without a warrant if they suspect non-compliance. While they’re not armed, they are enthusiastic and it’s not just contractors who should be afraid; the headquarters of telecoms firm Ericsson was surrounded by agents in 1999 after reports of unregistered workers were made.

7. American for life – The USA offers an attractive setting for foreign contractors to operate, however American citizens working overseas must continue to pay domestic tax rates for the rest of their lives, regardless of where they’re based.

8. Welcome to Russia – Foreign contractors are so welcome in Russia that they even pay less tax than the locals do. In Russia companies do not need to pay social security taxes (30 percent!) for foreign highly qualified specialists. That’s why it is more tax-efficient for employers to recruit foreign nationals. But don’t tell your Russian colleagues – they might envy you!

9. Don’t pack the gum, chum – All contractors wanting to work in Singapore must sit an exam in order to receive a renewable employment pass, which allows them to work in the country for up to two years. And aside from tax, Singapore is home to a number of quirky laws, including the fact that all chewing gum must be prescribed by a GP, so remember to leave the gum at home.

10. Remember your degree certificate in Belgium – Working as a contractor in Belgium isn’t particularly easy. Professionals must possess a degree-level qualification, or have a family member who does, and is willing to support their application. Alternatively, contractors may be forced into completing an arduous test before being allowed to work or could even have to be registered as a full-time employee of the organisation they’re working for.

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