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October 19, 2020 at 8:16 am #87582ExpatInfoDeskKeymaster
Posted by Lucy , 1 reply
Hello fellow expats! I spent only 11 days in UK since October 2012 so I believe I’m a non tax resident there. Now I have been given an opportunity to work as a IT consultant remotely for a client in US. Do I HAVE to be a resident somewhere? Or can I just casually go in and out of Asian countries working from my laptop (I can’t get working visa’s) without notifying any government of my earnings. I wont be using a UK bank account and 0 money will go to UK. Will I be on the beach looking over my shoulders all the time though? If I do need to be a resident somewhere then I was thinking about Panama as it’s the cheapest (US$20k Teak investment) I really wanted the apply for the MM2H program in Malaysia but that costs US$125K… I’m only 25 yrs old and haven’t had that much time to save yet. Can anyone show me the light at the end of this dark tunnel? Thanks in advance, Lucy
You may not owe the UK anything. And you certainly won’t owe the Asian countries anything if you country hop every 90 days, they’ll never know what you are doing. That’s where the good news ends. You are legally a 1099 Contractor for the US based company and they MUST issue you an IRS 1099 Form each January showing how much they paid you. They also report the same info to the IRS. It doesn’t matter where they send you the money, the means (Paypal etc). ALL your income is taxable and you must file a 1040 each year because you earned it in the USA according to them. If you don’t, failure to report income is a FELONY. There will be an international bench warrant issued to hold you and send you to the US. The next country you show up in will have access to that warrant. There is a way around this. The US has agreements with some countries that give you credit for income taxes you paid there, if you filed and paid. But to do that you must have a working visa and pay all applicable taxes. Imagine Japan-Ward Tax, Pension Tax, Health Tax, Gaijin Tax, 10 others. Panama sounds like the way to go for you. And don’t let the American company pay you off the books. The day they get busted by the IRS for something they will turn you in like a wet rag. Hope this helps. Any consolation, Americans must file with the IRS every year no matter where they live- even an expat for 20 years in the Philippines must file a 1040 and pay Taxes they earned in the PI to the IRS every year minus credit for what they paid locally in income tax.
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