Posts

Showing posts from 2020

Employee or independent contractor: What’s the difference?

Image
When I speak with location independent entrepreneurs and expats, the issue of employee vs contractor frequently comes up.

There is no uniform test to distinguish employees from independent contractors. Government agencies such as the IRS, the U.S. Department of Labor (DOL), and the National Labor Relations Board (NLRB) each look at their own set of factors. The same is often true of the state where the business is located.

While the tests for determining a worker's classification differ, there is a common thread: Definitive answers can be difficult to find.








What’s the difference between the classifications? Why does it matter?

The IRS has long had a voice in the categorization discussion.  In 1987, based on an examination of cases and rulings, the IRS developed a list of 20 factors to consider when determining whether a worker should be classified as an employee or independent contractor. The IRS’ next steps included the identification of three categories of evidence that may be rel…

Being Location Independent within the EU

Image
I previously wrote on the trend towards the EU taxing its non resident citizens -
http://www.mooresrowland.tax/2020/01/the-eu-taxing-non-resident-citizens.html
Similarly, we are frequently approached by location independent international entrepreneurs in the EU who would like to remain in the EU.





To understand the freedom of establishment, we refer to Articles 26 (internal market), 49 to 55 (establishment) and 56 to 62 (services) of the Treaty on the Functioning of the European Union (TFEU) https://www.europarl.europa.eu/factsheets/en/sheet/40/freedom-of-establishment-and-freedom-to-provide-services

Thanks to freedom of establishment, any European citizen can come and go from the country they are in, whenever they choose.  Within the Schengen Zone, there are practically no requirements to becoming a resident within another EU State besides having valid health insurance, a residence and a minimum income of about €80 a week.
Thanks to EU protection of rights, when it comes to the tax on …

The Tax Cuts and Jobs Act’s Impact on Cross-Border Transactions

Image
We've wrote alot about TCJA in general and GILTI in particular -
http://www.mooresrowland.tax/2019/02/gilti-rules-particularly-onerous-for.html
http://www.mooresrowland.tax/2018/02/us-exposed-owner-of-international.html
http://www.mooresrowland.tax/2018/12/the-2017-tax-cut-and-jobs-act-and.html
http://www.mooresrowland.tax/2019/11/switching-from-s-to-c-corporation.html
http://www.mooresrowland.tax/2020/01/foreign-companies-unintentionally.html
http://www.mooresrowland.tax/2019/01/gilti-regime-guidance-answers-many.html



Two years after the enactment of the Tax Cuts and Jobs Act (TCJA), the most significant tax reform enacted in a generation, taxpayers continue to encounter substantial uncertainty arising from interpretations of new statutory provisions, reinforcing calls for administrative guidance to provide more clarity.

The TCJA introduced comprehensive international tax reforms that have profoundly impacted multinational companies and cross-border transactions. The sweeping reform was…

Key Points on South Africa Taxes

Image
South Africa has a residence-based tax system, which means residents are, subject to certain exclusions, taxed on their worldwide income, irrespective of where their income was earned. By contrast, non-residents are taxed on their income from a South African source. Since tax systems differ from country to country, there is a chance that a particular amount could be taxed twice. This possibility of double taxation is, however, often alleviated by tax relief contained in various Double Taxation Agreements (DTAs). These DTAs are international agreements contracted between countries to deal with potential competing taxing rights against the income of the same taxpayer. Under the provisions of the DTA, the non-resident’s remuneration earned in South Africa may not be subject to normal tax in South Africa where specific requirements are met.

Who is regarded as a non-resident?Let’s start by defining what we mean by "resident". Understanding that, you will know whether you meet the …

How To Form a US Corporation... Tax-Free

Image
All things eventually come back into vogue, and the tax world is no different. In the early part of the 1980’s, C corporations were everywhere. Then, as part of the 1986 reform, Congress repealed theGeneral Utilities doctrine, reinstating double taxation upon liquidation of a corporation and relegating the “C” to the entity choice of last resort.





C corporations have returned to prominence. Why? For starters, there’s a new 21% corporate rate — down from 35% — and the potential to exclude all gain from the sale of stock five years down the road under Section 1202 that is specific to a C corporation. In addition, while the Tax Cuts and Jobs Act also added a 20% deduction for owners of flow-through businesses, many business owner — think: doctors, lawyers, accountants, actors, and athletes — aren’t eligible for the deduction. As a result; the effective federal corporate rate is pretty much equal as a C corporation when compared to an S corporation or partnership for many business owners, ca…