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Welcome to Russia – Foreign contractors are so welcome in Russia that they even pay less tax than the locals do. In Russia companies do not need to pay social security taxes (30%!) for foreign highly qualified specialists. That’s why it is more tax-efficient for employers to recruit foreign nationals. But don’t tell your Russian colleagues – they might envy you!
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Or the Swedish… – Sweden may have a less intimidating reputation than Russia, but it’s still not a place you want to be a non-compliant contractor. The Swedish Tax Agency has more powers than the police in many ways and can enter a home without a warrant if they suspect non-compliance. While they’re not armed, they are enthusiastic and it’s not just contractors who should be afraid; the headquarters of telecoms firm Ericsson was surrounded by agents in 1999 after reports of unregistered workers were made.
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Want to work in Germany? Become an atheist – If a freelancer operating in Germany belongs to the Roman Catholic or Protestant communities – and declares their religion - then they will have to pay an amount equal to 8-9% of their income tax to support their particular church. Want to avoid this? Consider becoming an atheist!
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Heading to Aruba? Take your partner – If you were to guess the country with the highest taxes, it’s unlikely you’d pick Aruba in the Caribbean. Professionals operating in the country who earn more than $171,149 are subject to income tax at 58.95% although this is reduced by 3% for married couples.
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Enjoy a 14 month year in Spain – One of the most attractive factors of working in Spain, aside from the weather, is that professionals generally receive bonuses in July and at Christmas that equate to being paid an additional 13th and 14th months’ salary.
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Remember your degree certificate in Belgium – Working as a contractor in Belgium isn’t particularly easy. Professionals must possess a degree-level qualification, or have a family member who does, and is willing to support their application. Alternatively, contractors may be forced into completing an arduous test before being allowed to work or could even have to be registered as a full-time employee of the organisation they’re working for.
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American for life – The USA offers an attractive setting for UK contractors to operate, however American citizens working overseas must continue to pay domestic tax rates for the rest of their lives, regardless of where they’re based.
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Enjoy an extended break in Brazil – Brazil is home to some very contractor-friendly taxation laws, not least that professionals are considered as non-residents for a total of 183 days, or six months, out of a 12-month period, regardless of whether these days run consecutively or not. However, following the completion of this period, contractors are expected to pay full taxes and manage the, often extremely complex, Brazilian labour laws.
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Don’t pack the Wrigley’s –All contractors wanting to work in Singapore must sit an exam in order to receive a renewable employment pass, which allows them to work in the country for up to two years. And aside from tax, Singapore is home to a number of quirky laws, including the fact that all chewing gum must be prescribed by a GP, so remember to leave the Wrigley’s at home.
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1Paying twice as much tax as your neighbour? – Switzerland is made up of 26 different cantons, or regions, each of which has different rules and regulations regarding employment. Even moving to a neighbouring street could therefore mean you’re exposed to a completely different system of complex tax law.
Michelle Reilly is managing director for UK & Europe at CXC Global
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