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If i working remotely from another state9/15/2023 While 4 months may sound like oodles of time, don’t be deceived. But a good rule of thumb is that typically if your employee is working from somewhere for more than around 4 months in a year, this will trigger local employment and tax regulations. The number of days after which this kicks in varies from country to country. These will come into effect at different times, depending on the country your employee is more permanently working from. There are two things you must be aware of: In short, you should be concerned as soon as your employees start working abroad. In what follows we’ll give you the insights you need in order to effectively manage these risks. So what are the pitfalls to watch out for? Here are some key ones: Beyond this, hefty fines and severe penalties are also a very real possibility. And don’t be fooled if you aren’t immediately taxed, this can also occur retroactively. If you don’t employ them locally, or are unable to do so for logistical reasons, you could find that your company becomes subject to income and corporate taxation. It’s worth noting that after a certain number of months spent abroad, which varies by country, as the employer, you are legally required to pay tax and social security contributions to your remote employees and to employ them in accordance with local employment law. Although your corporate policies might be relaxed about this, it is important to be aware of the legal and tax issues that you and your staff may unwittingly be exposed to. While some of your employees might be working from their holiday homes others may have packed their bags to work more permanently from an exotic location further afield. Since the lockdown of numerous countries around the world, for many, the once distant prospect of working from home or abroad has now become the norm. During the Covid-19 pandemic many companies have had to confront the following question: what happens to the legal status of my employees if they choose to work abroad? We’ve identified some of the key legal and tax risks that you need to be aware of when your remote employees decide to work abroad.
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