Income from two countries

[brian_garvan@hotmail]

I have the option of becoming a salaried employee working for two companies in two countries (UK + Germany) on a part time basis. Is it legal to pay a reduced income tax in each country, rather than pay a higher rate by declaring all my income in one country? I travel to such an extent that residency is a grey area. Please advise as I could save a lot of money by paying separate income tax in UK and Germany. Would I need to get an address and social security number in Germany in order to be a salaried employee of a german company?

Thanks,

M

[Geoff2ey]

Hello there: Your residency in the UK is not grey, it is a matter of fact each year that is arrived at by counting the days according to the rules. You should try to arrange your travel to avoid arguments of total days in the UK being just around the 180 day threshold, as you might get ill, planes can go on strike etc; that could cost you dearly if you sailed too close to the wind. It would be efficient if you could relocate to a third country and travel to the UK or Germany from there. This would give you somewhere to relax free of "counting the days" as you would not be earning money in the third country.
I suggest you plan out a "typical" year as best you can and get together with an international tax laywer or tax accountant.
hope this helps
Geoff

[brian_garvan@hotmail]

So, if I lived in Belgium or Holland and commuted to work in Koln (Germany) and the UK as necessary, then presumably I would not be considered resident in either country where I was working and would not meet the threshold for residency in any country. I am Irish not UK citizen, currently pretty much domiciled in UK though.

Thanks,

[Geoff2ey]

Hello again: Being non-resident will not affect your liability for paying income tax in the countries you earn your money in, it can however simplify the annual tax returns to each country as those countries will not generally seek to tax you on your world-wide income, or income outside of their boundaries. Seems you already have the third country available, i.e. Ireland, and a base there could be beneficial as you have Irish domicile by birth and that would be hard for any tax regime to challenge. While in the third country it would be useful to live off capital, and not import income. There are various ways to achieve this. You still need to talk to an expert.
Good luck
Geoff

[expattax]

Hi Brian and Geoff,

How is the oil business Geoff?

Anyway Brian, advice from an expert. Geoff's advice was sound as far as it went but was unfortunately not complete.

In addition to the 183 day rule there is also a 90 day rule used on average over a 4 year period.
Thus if your UK days exceed 90 days you can still be treated as a resident.

Even if that rule is not met as a "mobile worker" you might still be caught see IR Tax Bulletin 52.

If you wish further advice and a quote please let me know

Mark J Hooper
US Enrolled Agent
expattax@btopenworld.com