Imagine for a second that the pandemic is over. Global travel has resumed, Covid-19 hot spots are a thing of the past, and companies are keeping a promise some have been making lately to attract top talent: to allow remote work from anywhere in the world, at least for a few months a year.
Then envision a Londoner, a New Yorker, and a Hong Konger walking into a bar. Let’s say it’s in Rio de Janeiro. They all make the same salary—$100,000—and have been allowed to work remotely from Brazil for two months.
Once they’ve put down their caipirinhas and returned home from their stints abroad, who will owe the most in taxes? According to Robert Salter of tax and advisory firm Blick Rothenberg, our remote worker from New York could face the highest bill, while the Londoner could have nothing extra to pay. This assumes, however, that all three fill out their Brazilian taxes on time in accordance with regulations and—perhaps most important, to avoid costly mistakes—in Portuguese.
And Salter warns of a worst-case scenario for this new generation of jet-setters: being required to file multiple tax forms in different countries while also losing any benefits from tax treaties between jurisdictions. “It could be a disaster,” he says. “You could have to do four or five tax returns.”
Employees who work abroad even for just a few weeks may find themselves liable for taxes in overseas jurisdictions, Salter says. Many countries have double-taxation agreements in place to avoid excess taxation. But such agreements may apply only to federal taxes and not to city or state obligations that are common in many parts of the U.S. or social security liabilities common in Europe.
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Instagram's Founders Say It's Time for a New Social App
The rise of AI and the fall of Twitter could create opportunities for upstarts
Running in Circles
A subscription running shoe program aims to fight footwear waste
What I Learned Working at a Hawaiien Mega-Resort
Nine wild secrets from the staff at Turtle Bay, who have to manage everyone from haughty honeymooners to go-go-dancing golfers.
How Noma Will Blossom In Kyoto
The best restaurant in the world just began its second pop-up in Japan. Here's what's cooking
The Last-Mover Problem
A startup called Sennder is trying to bring an extremely tech-resistant industry into the age of apps
Tick Tock, TikTok
The US thinks the Chinese-owned social media app is a major national security risk. TikTok is running out of ways to avoid a ban
Cleaner Clothing Dye, Made From Bacteria
A UK company produces colors with less water than conventional methods and no toxic chemicals
Pumping Heat in Hamburg
The German port city plans to store hot water underground and bring it up to heat homes in the winter
Sustainability: Calamari's Climate Edge
Squid's ability to flourish in warmer waters makes it fitting for a diet for the changing environment
New Money, New Problems
In Naples, an influx of wealthy is displacing out-of-towners lower-income workers