Expatriates and Tax
We all know the life and times of an expatriate can be challenging, but one of the biggest hurdles is what to do with taxes?
Tax can be a tricky subject for expats and countries differ with their laws and rates which can get confusing; Singapore, Saudi Arabia and Qatar have some of the lowest tax rates while Netherlands, Denmark and Belgium are at the other end of the spectrum. It is always best practice to seek tax advice about laws and legislations before entering a new country you wish to reside in, but here are a few focal points from both taxing associations and expats.
A professional tax service can ease expats of stress, having a company take care of taxing situation is one less thing to worry about, and in the eyes of the professional service it is absolutely their job to make sure that the expatriate is 100% catered for. A company like this will guide and take control of these funds which can be favourable for the individual. It’s a possibility that expats could make mistakes on their own taxes at first which can be a concern in a foreign country. In addition to this, offshore banking can be an avenue to venture down as this can offer troubled expats further help, they can offer potential tax efficiency, flexibility and a secure location for the funds of the expat which gives them not only piece of mind but convenience.
In the views of British expatriates they would automatically think that they are exempt from UK tax when they move away from the country, that is often not the case and unfortunately it isn’t straight forward. The best advice we can give to expats is always double check with an expert, who will point the individual in question towards sorting the enquiry. The reason it becomes such a complicated situation is that it depends on an individual’s personal tax and the domicile status of the individual. Other assets such as source of income and the time you leave the country will determine whether you are exempt from UK tax. Any individual that will be leaving the UK will have to fill out a p85 form which has to be sent for the attention of HMRC although this should not be completed for those who are looking to file for a tax return the same year of leaving the country.
From an expats point of view a professional taxing service is time efficient; however there are some disadvantages for such a luxury. Outsourced companies have huge experience and understanding in taxing jurisdictions that many expats may not. These companies will look at foreign credit, tax return enquiries and what the individual can and cannot be eligible for, but have fees involved. There could be some hidden charges involved and like most things in life will have to do extensive research to find the best outsourcing company that suits the individual best. Time difference can also play a component in which company is best, as individuals may use a preferred association from a different country, time zones and language barriers can make it difficult to get the enquiry quickly.
Taxes for expats can be precarious and find that when they move abroad their situation with how taxing works in that particular country can be arduous, it’s always best to get someone else’s take on the situation preferably an expert who has had previous experience.