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Working overseas for US company Arizona

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  • Working overseas for US company Arizona

    Hello,

    I am looking for some information on a very particular situation and I am having trouble finding answers.

    I am a foreign national, permanent US resident, currently working here for a US company, for several years. In a few months, I plan to go back and live overseas, but keep the same job with the same company, working remotely.

    I am trying to find information on the legality of this, what my company will need to do to continue to employ and pay me etc...

    Thanks for any information!

  • #2
    By "foreign national but a permanent US resident," I am presuming you hold a "green card" and as such would be considered a resident-alien v. non-resident alien for US tax purposes. As such, when you work abroad, ALL of your income will be subject to US taxation since U.S. Citizens and resident aliens are taxed on their worldwide income. The U.S. tax code does allow, however, for the exclusion of certain foreign earned income and housing expenses from taxation. You can read more about the rules and limitations here http://taxes.about.com/gi/dynamic/of...html%23d0e4221

    Note: You may also be able to avail yourself of tax treaty provisions the United States has eneterd into with other countries, which could further limit the amount of your income that would be subject to U.S. Taxation. The laws and analysis of tax treaty provisions can be very complicated. Accordingly, you should seek the professional assistance of a CPA or tax attorney in your local area for further advice.
    Last edited by BSPCPA; 12-07-2007, 11:47 AM.
    Barry S. Phillips, CPA
    www.BarryPhillips.com

    IRS Circular 230 Disclosure: This response is intended to provide general information and written for educational purposes only. It does not establish a client relationship. This communication is not intended to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to any party any matters addressed herein.

    Comment


    • #3
      What country? Are you planning to return to your country of origin or will you be a TCN? The rules are very different depending upon the country. There is nothing that would prevent you working overseas for a US organization. The issues are going to be what employment laws apply and taxes. I'd suggest working with the embassy for whichever country you are planning to work from as they can direct you to someone who can answer these questions and may even have someone on staff. Some do, some don't but I never had a problem with one not at least being able to refer someone to a professional who is well versed in these matters.
      I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

      Comment


      • #4
        Well, the country I am going back to has agreements and there will be only one income tax, over there. Furthermore, even though I have a green card, I will eventually lose the benefit of it after a certain amount of time, which will probably be 6 months.

        What I am most interested in learning about is not so much my own situation with taxes but that of my employer. I want to learn if it is legal for a US employer to have on their payroll a non-citizen residing in another country, and what the employer will have to do to make this work, what this means in terms of payroll deductions (as I believe there would be no more social security or medicare tax). My employer is doing this for *me*. I want to make sure it is relatively painless for them, and of course possible. Coudl I be on the payroll, would I need to become a contractor instead of an employee, what happens on the employer side etc...

        Thanks.

        Comment


        • #5
          Originally posted by ElleMD View Post
          What country? Are you planning to return to your country of origin or will you be a TCN? The rules are very different depending upon the country. There is nothing that would prevent you working overseas for a US organization. The issues are going to be what employment laws apply and taxes. I'd suggest working with the embassy for whichever country you are planning to work from as they can direct you to someone who can answer these questions and may even have someone on staff. Some do, some don't but I never had a problem with one not at least being able to refer someone to a professional who is well versed in these matters.
          Sorry, there is no need for me to be mysterious. I would be going back to France, which is my country of origin.

          There are 2 sides to the problem. One is what I will have to do over there for my own taxes, and I don't think I would have too much trouble finding out after the move. The other is what happens for my employer over here. I need to be able to be paid in a practical way, and I was just worried that with no office in France, they would not be able to keep me as a bona-fide employee if I do not legally reside in the US (anymore). While regular trips back to the US for meetings would probably keep my green card alive, it's still not a clear situation.

          Comment


          • #6
            If you are working outside the US, then you do not have to be legally able to work inside the US. There is no problem. The biggest issue is going to be physically getting you your pay. Cashing out of country checks is not an option in many places and most US payroll systems can not direct deposit into a foreign account. If you keep your US bank account, it shouldn't be an issue.

            I had lots of employees who did what you are doing and it really isn't that big a deal. Depending upon what you do, your employer may or may not be obligated to provide WC insurance. Likewise, you may or may not be able to continue with any health insurance coverage they offer.
            I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

            Comment


            • #7
              Originally posted by ElleMD View Post
              If you are working outside the US, then you do not have to be legally able to work inside the US. There is no problem. The biggest issue is going to be physically getting you your pay. Cashing out of country checks is not an option in many places and most US payroll systems can not direct deposit into a foreign account. If you keep your US bank account, it shouldn't be an issue.
              It's good to learn that I'm worrying more than I should. I was afraid of the direct deposit problem though, and I would rather have my account in France, but I suppose I need to wait and see what the payroll system will allow.

              Originally posted by ElleMD View Post
              I had lots of employees who did what you are doing and it really isn't that big a deal. Depending upon what you do, your employer may or may not be obligated to provide WC insurance. Likewise, you may or may not be able to continue with any health insurance coverage they offer.
              Having 3 children, one of my main reasons for returning "home" is health coverage, or the lack of it here. My main goal is to retain my job, and the maximum amount of pay. Once in France, I will have to contribute on my own to social services because of the lack of a French employer.

              Thanks for the information. It is reassuring as I was afraid there would be some kind of block relative to US laws.
              Last edited by LeChuck; 12-07-2007, 12:24 PM.

              Comment


              • #8
                LeChuck: Even though I have a green card, I will eventually lose the benefit of it after a certain amount of time, which will probably be 6 months.

                Green Cards issued since 1989 have an expiration date on the front of the card that indicates a 10-year validity. However, you will not lose your permanent resident status if you do not renew your Green Card – your permanent resident status will not expire or change. This is important for you to know from a US income tax standpoint.

                LeChuck: I want to learn if it is legal for a US employer to have on their payroll a non-citizen residing in another country, and what the employer will have to do to make this work, what this means in terms of payroll deductions as I believe there would be no more social security or medicare tax.

                Absolutely no problem with a US employer having a US non-citizen on its payroll. As to the issue of Social Security & Medicare tax withholdings, here is some general information for you regarding the tax treaty the US & France have enetered into on this matter. http://www.ssa.gov/international/Agr...ts/france.html
                Barry S. Phillips, CPA
                www.BarryPhillips.com

                IRS Circular 230 Disclosure: This response is intended to provide general information and written for educational purposes only. It does not establish a client relationship. This communication is not intended to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to any party any matters addressed herein.

                Comment


                • #9
                  Barry,

                  With regards to the green card, I do know that there is no expiration of my status as permanent resident even when the card itself expires, however as far as I know, the permanent residence status will be lost after a certain length of stay outside of the US, which I believe is 6 months. That being said, I would prefer to keep that status if I could, but I believe that's how it works.

                  Thanks for the link!

                  Comment


                  • #10
                    Just like a US Citizen does not lose his citizenship status when he/she leaves the states for a protacted period of time, a Green Card holder does not lose his/her status either. A different result may occur if you were here on a VISA however.
                    Barry S. Phillips, CPA
                    www.BarryPhillips.com

                    IRS Circular 230 Disclosure: This response is intended to provide general information and written for educational purposes only. It does not establish a client relationship. This communication is not intended to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to any party any matters addressed herein.

                    Comment


                    • #11
                      Here is a page on the USCIS site:

                      http://www.uscis.gov/portal/site/usc...0045f3d6a1RCRD

                      More specifically, the part that says:

                      "You may be found to have abandoned your permanent resident status if you:

                      * Move to another country intending to live there permanently.
                      * Remain outside of the US for more than one year without obtaining a reentry permit or returning resident visa. However in determining whether your status has been abandoned any length of absence from the US may be considered, even if it is less than one year.
                      * Remain outside of the US for more than two years after issuance of a reentry permit without obtaining a returning resident visa. However in determining whether your status has been abandoned any length of absence from the US may be considered, even if it is less than one year.
                      * Fail to file income tax returns while living outside of the US for any period.
                      * Declare yourself a “nonimmigrant” on your tax returns."

                      Comment


                      • #12
                        Originally posted by LeChuck View Post
                        It's good to learn that I'm worrying more than I should. I was afraid of the direct deposit problem though, and I would rather have my account in France, but I suppose I need to wait and see what the payroll system will allow.
                        This does not always work, but assuming that your U.S. checking accounting is with a large bank with branches in France, try talking to your bank. I have worked with ExPat employees based in other countries and in at least some of those countries we were able to make normal ACH (direct deposit) payments to a U.S. account in a U.S. branch bank such as Bank of America that had foreign branch offices. Our employees were able to access funds from the foreign country. I had one ExPat in France, and I am pretty sure that this was one of the countries that this worked in. I remember that countries we had problems with were in parts of Latin American and parts of Asia. If this does not work, the employer either has to use FedWires to the local bank (expensive and sometimes error prone) or establish a local currency account.

                        The ExPat we had in France was similar to you. He had worked in the U.S for a while and then went to France to open up a sales office. I have no idea if he was dual citizenship or permanent U.S. residence status. What I do know is that 90% of his compensation was on a separate French payroll, not just paid in French currency but subject to French reporting and taxes. The U.S. portion of the payroll was just big enough to handle 401(k) and maybe FICA.

                        This is not DIY stuff. We had a big international accounting firm with offices in both countries handling this stuff. I handled the U.S. side of the payroll, but the accounting firm did the French payroll, plus the employee's U.S. tax returns.
                        "Reality is that which, when you stop believing in it, doesn't go away".
                        Philip K. **** (1928-1982)

                        Comment


                        • #13
                          I do not know of a bank here having branches in France, but it's possible that some banks work together.

                          I have no doubt that the tax portion will be a headache for me and I would have to talk to a specialist, although my situation would not be that complicated I think. I would not be building a branch or have to deal with the employer side of taxes in France, but just my income, and would not have to deal with remaining assets in the US. It would be different if the employer wants to build an office in France. Then they would have to deal with taxes there as well.

                          Comment


                          • #14
                            Originally posted by LeChuck View Post
                            I do not know of a bank here having branches in France, but it's possible that some banks work together.

                            I have no doubt that the tax portion will be a headache for me and I would have to talk to a specialist, although my situation would not be that complicated I think. I would not be building a branch or have to deal with the employer side of taxes in France, but just my income, and would not have to deal with remaining assets in the US. It would be different if the employer wants to build an office in France. Then they would have to deal with taxes there as well.
                            Try talking to Bank of America then. That was my last employer's bank and most or all of our ExPats used that bank because the (very large) employer had a lot of pull with them.

                            There is a complication and that is if any company has employees working inside a country, then generally speaking the company has to deal with that countries tax laws. It has been true for the dozen or so countries that I have worked with. Arguably it is your employer's problem and not yours.
                            "Reality is that which, when you stop believing in it, doesn't go away".
                            Philip K. **** (1928-1982)

                            Comment


                            • #15
                              Originally posted by DAW View Post
                              There is a complication and that is if any company has employees working inside a country, then generally speaking the company has to deal with that countries tax laws. It has been true for the dozen or so countries that I have worked with. Arguably it is your employer's problem and not yours.
                              Really? I would think this is only when they do have a local representation (office). We will of course ask the people we work with for payroll and accounting but I wanted to get as much information as possible on my own. Unfortunately in this case it cannot be my employer's problem. My employer has nothing to gain in me being overseas and this is only to my family's benefit, which is why I am trying to do as much of the figuring out as possible.

                              Thanks again for the help.

                              Comment

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