One of the most frequently asked questions we are faced with is, ‘How and under what conditions is it legal to use a PSC when working abroad in the context of the EU/EEA?’ Let us briefly explore this, to clarify some common misconceptions.
First and foremost, it should be noted that an EU national has the same rights to use his/her PSC to work throughout the EU/EEA as a local person. This is guaranteed by the Treaty of Rome.
What you must do though is respect the local laws that apply in terms of employment law, VAT, social security, labour leasing law, income tax, corporation tax, capital gains taxes and dividend taxation. Doing absolutely nothing about these obligations amounts to tax avoidance at best and tax evasion at worst.
To get an intuitive understanding of this imagine a foreign contractor who were to come to work in your country and pay none of these duties. Not only would you feel indignant, but you would also feel that the same laws should apply to this person as to you. In this you would be correct: they do.
If you or your contractors want to use their PSC to work abroad and you are not sure if this is a wise thing to do please contact Access Tax and Accounting Limited directly, or contact your existing sales consultant at Access Financial. You may be pleasantly surprised with how attractive an option this can be.
Just to be clear to those who are unsure, using your PSC when done compliantly is:
- Not a split payroll
- Not tax evasion
- Not tax avoidance
Where applicable, every PSC working abroad via Access Tax and Accounting Limited is registered as a foreign employer, a local payroll is operated and the profits and distributions are all subject to proper declaration and tax payment. All the working directors are correctly registered locally and compliant in all respects.