A Guide to Remote Work in Another Country and Taxes

A Guide to Remote Work in Another Country and Taxes

The pandemic has changed many things about the workplace, including making many businesses permanently hybrid or remote. As a result, many people who never considered working abroad in the past are now able to do so. If you are one of the many people thinking about packing up and heading overseas to enjoy a great quality of life for a lower cost through remote work in another country, here’s what you need to know for your taxes.

Can You Do Remote Work in Another Country?

One of the first questions many people have is whether or not you can live in one country and do remote work in another country. Most countries require you to obtain a work visa in order to perform remote work, regardless of what country the work is being done for. Look for a digital nomad visa that will let you stay in the country for a year or longer. Choosing the right visa is critical, as it will determine how long you can stay, what work you can do, and what tax responsibilities you have.

Will You Have to Pay Taxes to Do Remote Work in Another Country?

Tax law varies from country to country, which is why it’s so important to work with an experienced accountant before you start remote work in another country. Many countries have strict rules that dictate how long you can stay and work in their country before you are required to pay taxes there. For example, many countries ask you to start paying taxes as a resident if you are staying for longer than six consecutive months. Even if you are a part time worker or a contractor, you will be subject to these rules.

What Happens If You Don’t Pay Taxes?

Just like in the United States the IRS wants to collect its fair share, other countries want to collect taxes as well. If you do not declare residency or get the right visa, you can face steep fines and penalties on top of your existing tax liability. Some countries will prevent you from reentering for a certain period of time, and some others will even prove that you with criminal charges.

Overcome International Tax Challenges with Help from MKS&H

MKS&H provides tax and accounting services to businesses of every size and in every industry. We can work with you to make international taxes easily and avoid the most common international tax challenges. Contact us today for a consultation.

About MKS&H: McLean, Koehler, Sparks & Hammond (MKS&H) is a professional service firm with offices in Hunt Valley and Frederick. MKS&H helps owners and organizational leaders become more successful by putting complex financial data into truly meaningful context. But deeper than dollars and data, our focus is on developing an understanding of you, your culture and your business goals. This approach enables our clients to achieve their greatest potential.

Like what you read? Sign-up for our C-Suite Spotlight Program.

About Author

MKS&H

MKS&H

MKS&H is committed to providing personalized tax and accounting services while developing a deep understanding of you, your culture, and your business goals. Our full view of financial systems and the people behind them allow us create and evolve the best solution that will help you and your business thrive. The accounting experts and consulting professionals at MKS&H work together to help you achieve the financial results you want.

Related posts

What Is IRS Form 5471?

While you might be currently living overseas, that does not mean that you are free from the tax obligations of being an American citizen. Even if you work overseas, there are still tax forms that you are required to file. One of those is known as IRS Form 5471....

Read More