hrtCareer

Double taxation is a common problem due to worldwide work mobility and skills shortages. Basically, it means that we pay twice for a single source of income. The lack of a competent workforce impacts companies across industries. While less developed countries have skilled workforce to spare, others require talent. In recent years, flexible work arrangements and remote work are reshaping working relationships globally. The adoption of new technologies like artificial intelligence is bringing changes and possibilities to work both asynchronous and synchronous. Tech is changing the skill sets and working relationships. It seems that around 2028 about 44% of our set of skills will be disrupted. T Employers from European economies like Germany, France, Belgium, the UK and the Netherlands have difficulties filling in-demand jobs. Some countries are trying to fill their skills gap by using workforce from eastern and southern parts of Europe. Also, the remote work trend is helping them to attract highly skilled employees with lower costs. Employers are trying to find talent for tech, health, and climate innovation-focused initiatives. Ironically, the latest technological advancements like AI generate at the same time unemployment and skill shortages. This is why continuous learning, upskilling and reskilling are essential even if is a complex endeavour. Employment and contract working arrangements There are several solutions for hiring employees from another UE country. Global employers can opt for temporary deployment from other EU states. Also, another solution mostly used for STEM jobs is to hire contractors or freelancers. Hybrid or remote employment and contract working arrangements offer more flexibility and higher revenues for both sides. However, legal requirements and remote working conditions are different in every EU country. In some cases, European work regulations are overlapping with national laws. This overlapping is making contracting people complicated, especially from a taxation point of view. EU states have different regulations on foreign employees and contractors. It's a legal entanglement that ends with the employees paying taxes in two countries. Unless you become a resident of the country where you work, you will pay taxes in both countries.  Skills shortage and double taxation Foreign workers' employment is used to overcome skills shortages in countries that have a higher number of jobs available. Hiring needs are partially filled with a working force from Eastern and Southern Europe. The remote working trend is also encouraging cross-border employment or contracting favouring employees ‘mobility for global companies. However, EU employees and contractors are dealing with a double taxation problem. So, if you have a different tax residency than the country you are working in, most likely you will face the double taxation problem. This means that taxes are paid twice on the same income, regardless of it’s corporate or individual income. As an employee or contractor, you should know that tax rates in European countries are quite complex. You will need tax advice or constant self-documentation to be clear about where and when you should pay it. Different countries, different rules Each country has its own tax regulations, but in the EU,…