Working remotely as an employee of an EU company

[moneyker]

I am setting up an arrangement whereby I will work remotely for an EU company (in the Netherlands). There are advantages to me to set this up such that I am an employee of the company (rather than an external contractor). My question is about taxation and payment - in which country do I pay tax, and how is the other country informed of this and satisfied that I do not owe tax in their jurisdiction?
I am also a bit confused about PRSI and how that would work.
I see that there is a double taxation agreement between the countries (am not allowed to post the link here, sorry!), but I am still unclear about how it works out in practice.
Any advice greatfully received!

 

[stefanop]

Hi Moneyker,

I was in a similar situation many years ago (over ten years ago) so I don’t know if things have changed or not. I worked for 3 years remotely as a Paye employee (I’m a computer programmer) for a Irish company and was paid in an Irish bank account but was physically living in the south of France renting a studio working from there and only returning to Ireland roughly once a month for meetings etc. Because I was living in France for over 6 months even if I was paid in Ireland, I was deemed to be tax resident in France and should have paid the taxes in France, however since my wage was taxed at the source in Ireland, according to the double-taxation agreement Ireland-France, in France I should only have paid or reclaimed the difference, the “spread” between what I had paid in Ireland and what I should have paid in France. So for example if in Ireland I paid 5 euros tax on my 10 euros Payee wage and for the same job/pay I would pay 6 euros tax in France, I should have paid the French taxman the 1 euro difference. Conversely if in France the tax would have been 4 euros then I could have claimed a reimbursement of 1 euro from the French taxman. I never bothered anything anyway so I left everything as it was, never did any return in France. At a later stage a local accountant in France told me that technically I also had an obligation to declare my Irish wages in France even if they were taxed in Ireland, which I never did, but he told me that these things with foreign employees working remotely were rarely enforced in France. I guess he was right since after 12 years nobody ever chased me for anything and now the statutory limit is over (10 years in France). I cannot answer your question on PRSI

Seamus

 

[dublin67]

The Dutch company is required to register as an employer in Ireland and operate PAYE/PRSI/USC as they would if the company was Irish. Your status should not change as you are an Irish based employee and taxable under the PAYE system. Taxes should be deducted from your salary as your employer was Irish. In practical terms I would suggest to your employer that get in contact with an Irish accounting firm or payroll bureau and they'll take care of that.