According to an extremely exciting example there is an executive officer, citizen of three countries, lives in a fourth state with his family, performs work relating to the executive management of the Hungarian company in Hungary and in Austria in the frame of a secondment ordered by the Austrian company. The one million question here is where he has to pay taxes and social security contributions under which countries’ law?
The tax residency – based on which worldwide income is taxed – shall always be the first factor to be checked for individuals taking a cross-border engagement, as the length of the engagement, the family shift surrounding the new career may affect even the basis of the personal income tax relations. Moreover, in a cross-border situation not only the domestic law of the sending and the receiving countries but also their bilateral relations, i.e. the relevant treaties concluded between all the affected countries should be investigated. The social security coverage should also be scrutinized in details, on a separate ground different from the taxation.
The tax expert team of LeitnerLeitner undertakes to coordinate the regulations of all countries and solve such complicate situations. Moreover, our welcome package includes accomplishment of all reporting obligations to the labour law and tax authorities, prepare the payroll and tax advance calculations as well as to treat the special benefits, bonuses, stock grants and options. At the end of the year we prepare the tax return and take care about the documents necessary for the social security exemption. We harmonize the Hungarian and the foreign tax obligations.
The experts of LeitnerLeitner can remove all burdens of administration and tax calculation in cross-border situations from our client’s shoulders. We may assist you in individual cases, and also serve your company in all fields of taxation with full scope tax and accounting advisory, representation in front of the tax and financial authorities, even in special procedures.
The number of tax audits and their intensity is increasing both in Hungary and in our region, tax authorities work closely together regarding national and international issues. Is your company ready for these? Be prepared with the help of LeitnerLeitner.
For further information, please see our website, series of “Guidelines to taxation in Hungary”, our Hungarian blog, or contact us via e-mail at firstname.lastname@example.org.