Instructions for Employees working in Finland. International Contracting Guide

Transcription

1 Instructions for Employees working in Finland 1

2 Contents About White November About WNIC How may we help you? So what are the options? Our solution

3 About White November White November Group and its sister companies have been in operation for over a decade. White November is a management consultancy specialising in bespoke corporate and tax efficient solutions for high net worth individuals and small companies. In 2011, White November was approached by a group of specialist contractors whom were based in Scandinavia for a global oil and gas entity. These contractors were high earners and felt uncomfortable with the nature of solutions being offered by traditional umbrella companies both in terms of compliance and reputations. This same group of contractors approached WN with a mandate to provide a bespoke solution that allowed them to work in Scandinavia in a tax compliant and fully insured manner, while optimising their retention of remuneration. It was out of this mandate that our Partnership Solution was created. In servicing these contractors our researched showed that the European Contracting industry was poorly serviced. Many competitors were offering opaque solutions which were not tax compliant for the contractors and reputationally risky for agencies and end clients. We noticed a market gap for a high end provider to provide compliant solutions that are tax efficient and offer long term orientated options and strategies to contractors. Following much demand and success, White November s International Contracting (WNIC) became a permanent division within the group. 3

4 About WNIC WNIC work with international contractors across the EU/EEA and help each contractor to get better retention rates for the contracts they are working on, whilst being wholly compliant in their country of operation. White November International Contracting head office is based in Malta. Malta has an extremely attractive tax refund system approved by the EU. Local company, financial, and tax legislation are founded on UK law. From our head office in Malta, we are currently registered as employers and operate our solutions across the following countries within the EU/EEA Norway Sweden Denmark France Ireland Germany Finland The Netherlands Luxembourg Czech Republic. 4

5 How may we help you? Contracting abroad can be a particularly exciting prospect new cultures, climates and notoriously lucrative. Contractors working overseas mostly enjoy excellent rates of pay. Whether you re a seasoned contract worker or just starting your career in contracting, there are many issues you should be aware of before you take that seemingly profitable contract in a foreign country and are thinking of using your Limited Company: Once you have worked in a country for over 183 days you are considered a tax resident Once you agree to All countries have their own tax laws and legislations, your contract in a many of them will be very different to what you are foreign country, used to in your home country you will be Although you can potentially use your Limited entering a Company to work in a foreign country, in some countries it will not be compliant. For instance, you minefield double of taxation cannot use your Ltd Company to work in the treaties, confusing Netherlands and If you are working in France and tax laws and the putting money through a UK Ltd Company you will not be compliant with French tax laws question whether you of can use your own Ltd You can, of course, use your limited company to work Company or not. in many other countries. However please be aware you will need to: Look at all the implications regarding your corporation tax and personal income tax if your remit money back to the UK, as well as any local corporation tax if deemed a permanent establishment Look into the countries tax laws and double tax treaties in order to remain complaint in both your home country and the country you are contracting in 5 5

6 So what are your options? Using your own Limited Company This is generally an effective way to work as a contractor, however this can be very ambiguous when working abroad, especially with entity tests such as the IR35 in the UK and even harsher laws in countries such as Germany you will need to know the law inside and out and have enough time to deal with the administration work that comes from being self-employed in a foreign country you will need to employ a tax expert in that country to work through this for you. When you pay taxes through your limited company, you will be remitting the tax in your HOME country and not in the country you are working. Unfortunately, this means that a tax liability could potentially build up in the country you are working in and in most countries there is a chain law which means that tax liability can be passed onto the client you are working for. 6 6

7 Offshore Companies Your earnings are channelled through a company, partnership or trust based outside of your home country and therefore out of their tax jurisdiction. A very effective way to avoid paying tax on a large portion of your earnings, but that is exactly what it is- Avoidance. And is treated as such in many countries throughout the EU /EEA who are taking a very aggressive stance towards such arrangements, especially at the point when funds are repatriated into Europe. Umbrella Companies You can also choose to become an employee of the umbrella company and submit your time sheets accordingly. You may also be able to off-set expenses. Your umbrella company will take care of all the accountancy administration, payment of taxes and national insurance and your pay is paid directly into your bank account. Very simple and can be a very good option for contractors who are on a relatively lower rate of pay. Unfortunately, because you are paid a full salary through an umbrella company, you will have a relatively high tax bill especially if you are working in jurisdictions such as Norway, Sweden and Belgium, where tax can be as high as 50%. 7 7

8 Our Solution Like an Umbrella Company we employ you on a full time and definite contract, however unlike an Umbrella Company we also make you a partner in a corporate structure. That means that you have the comfort of being fully employed, and also fully insured through our substantial insurance policies, and we pay you a salary which is fully taxed in the country you are working therefore ensuring you are fully compliant. Since you are also a shareholder within our corporate structure, you will be allocated dividends on which we will fully pay all corporation tax for you leaving our contractors in many cases with a retention rate of up to 85%. Contractors will then need to pay dividend tax upon receipt of their dividend which they can choose when to take. This leaves contractors with the option to wait until they are resident within a jurisdiction with low tax or no dividend tax before taking receipt of their dividends. We advise that prior to accepting an international contract that you seek a professional opinion, especially if your contract exceeds 6 months or 183 days. If you are signed up, with us you will be assisted by a personal relationship manager and supported by both our in-house tax and legal team who are always on-hand to offer you any contractual advice you may need. 8 8

9 Tel.: Web: wnic.eu Facebook LinkedIn Twitter facebook.com/whitenovemberinternationalcontracting linkedin.com/company/white-november-international-contracting twitter.com/intcontractor Malta Office Level 8, The Plaza Commercial Centre Bisazza Street SLM1640 Sliema Malta 9