What tax implications does double taxation of employees in home office have?
April 15, 2023 | 120,00 EUR | answered by Albrecht Schneider
Dear tax advisor,
I am Karl Voigt and have been working from home for some time now. Due to the current situation, my employer has decided that we should work from home. This change has many advantages for me, such as flexibility in scheduling and no more commuting time. However, I now have concerns regarding the tax implications, especially regarding double taxation.
I have heard that double taxation can occur when I have to pay taxes on my income in both my country of residence and my country of employment. Since my residence and workplace are in different countries, I am worried that I may end up paying more taxes than before. I would like to know exactly what the tax implications of double taxation are for me as an employee working from home, and how I can protect myself from it.
Are there ways to avoid or at least minimize double taxation? What tax regulations apply in my case and what do I need to consider to avoid being disadvantaged? I would greatly appreciate it if you could help me and provide possible solutions.
Thank you in advance.
Best regards,
Karl Voigt
Dear Mr. Voigt,
Thank you for your question regarding double taxation in connection with your work in a home office. The current situation has indeed led to many changes, also in terms of taxation. I would like to explain in detail what double taxation is and how you can protect yourself from it.
Double taxation occurs when a taxpayer earns income in two different countries and both countries have the right to tax that income. In your case, since your residence and workplace are in different countries, there is a risk that both your residence country and your work country may claim the right to tax you. This can result in you having to pay more taxes in the end.
To avoid or minimize this double taxation, there are various options. One important provision that can help in your case is the so-called Double Taxation Agreement (DTA) between the two countries involved. This agreement determines which country has the right to tax your income and how double taxation can be avoided. It is important to inform yourself about the DTA between your residence country and your work country and potentially benefit from its provisions.
Furthermore, you should make sure to carefully keep all relevant tax documents and evidence in case of an audit by the tax authorities to demonstrate your tax situation. Professional tax advice can also help you take advantage of potential tax benefits and minimize double taxation.
Lastly, I recommend staying informed about current tax regulations and changes in the countries involved to stay up to date and avoid potential tax risks.
I hope that this information has been helpful to you and I am happy to assist you with any further questions. Thank you for your interest and inquiry.
Sincerely,
Albrecht Schneider
Tax Advisor
