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As businesses are aiming for global growth, cross-border employment becomes an essential part of internal agenda in most companies. However, global mobility is a complex topic that deeply roots from the areas of taxation and payroll, where local specifics and international frameworks are equally important aspects.
Our study was created in cooperation with our global business community Accace Circle, with the aim to provide a basic yet valuable overview of local jurisdictions for employers and help them to address their crucial obligations while bearing responsibility for their expatriates. Learn about basic information concerning tax and social security in Bulgaria, Cyprus, the Czech Republic, Estonia, Greece, Hungary, Latvia, Morocco, Poland, Portugal, Romania, Slovakia, Spain, Turkey and the United Kingdom.
A thorough strategic planning is required for the correct set-up of expat employment, as well as any work activity of the employee in a foreign country. The employer is the one to bear the responsibility for a correct evaluation of the tax residency of the employee, place of work, time spent working abroad and conditions of the work abroad. These points imply additional questions regarding the risk of permanent establishment and especially tax or social security obligations. Once these are clarified, the other demanding task is to follow the statutory requirements and filing obligations of the respective country.
Our tax, payroll and labour law experts will help you – as an expat or an employer – with expat tax and global mobility services, to obtain appropriate professional advice and effectively address the following cross-border mobility and international secondment matters.
In Bulgaria both resident and non-resident taxable persons can be employed. A resident person is someone who:
Individuals are taxed in Bulgaria based on their tax residency status. Bulgarian tax residents are taxed on their worldwide income.
Non-residents are taxed in Bulgaria only on their Bulgarian-source income, which has a very broad legal definition. Generally, this is all income derived as a result of economic activities performed in the territory of Bulgaria or as a result of disposal of property in Bulgaria.
Any income derived as a result of employment or of rendering services in the territory of Bulgaria is deemed Bulgarian-source income, regardless of from where or by whom it is paid.
Rental income or income from disposal of real estate property located in Bulgaria is considered Bulgarian-source income.
For the purposes of calculating the days of presence in Bulgaria within one or more periods, any part of the day of presence is regarded as a whole day (including day of arrival and day of departure). The period of residence in Bulgaria for the sole purpose of education or medical treatment are not considered as days of presence related to tax duties.
Split tax residency is acknowledged between more countries within one tax period.
In Bulgaria, the tax period is the same as the calendar year.
Based on the local tax system, salaries paid in January for the work completed in December are considered as taxable income of the next calendar year.
In general, the tax base is calculated from the gross income decreased with compulsory social and health insurance contributions withheld by the employer which are for the account of the employee, decreased by non-taxable parts of the income and tax reliefs, if applicable.
The non-taxable income from work based on an employment contract, subject to specific conditions and requirements set in the law includes the following:
Furthermore, the following deductions are applicable:
Social security is due by both the employer and employee. The aggregate rate of social security contributions is the following:
National insurance contributions include social security and health insurance contributions. The aggregate rate of social security contributions is 24.7% to 25.4%*, of which 14.12% to 14.82%* is payable by the employer and 10.58% is payable by the employee.
The aggregate rate of health insurance contributions is 8%, of which:
The total national insurance contribution rate (social security and health insurance) is 32.7% to 33.4%*, of which 18.92% to 19.62%* is payable by the employer and 13.78% is payable by the employee.
The above rates are applicable to Bulgarian nationals, as well as to EU/EEA nationals who are subject to Bulgarian social security contributions (i.e. who have not obtained a E101/A1 certificate of coverage issued from their home country social security authorities). Non-EU/EEA nationals are also subject to these contributions under certain conditions, except for health insurance contributions. If they have a permanent residence permit for Bulgaria, they will be subject to health insurance contributions too.
For the months of January, February, and March 2025:
The minimum monthly amount of the social insurance income by main economic activities and qualification groups of professions for 2025, is BGN 933.
BGN 3,750 – maximum monthly insurance income on which the health insurance contribution is calculated.
For the months from April to December 2025:
The minimum monthly amount of the social insurance income by main economic activities and qualification groups of professions for 2025, is BGN 1,077.
BGN 4,130 – maximum monthly insurance income on which the health insurance contribution is calculated.
*The range is due to the rate of contributions payable to the ‘Accident at Work and Occupational Illness Fund’, which is due only by the employer and can vary from 0.4% to 1.1% depending on one’s economic activity. The rate for the administration and services sector is 0.5%.
Social security contributions are calculated from the income received as all kind of labour remunerations under the Bulgarian legislation with several explicit exceptions. The calculation base is multiplied by the applicable rate.
For January–March 2025, the minimum base is BGN 933 and the maximum is BGN 3,750.
For April–December 2025, the minimum base is BGN 1,077 and the maximum is BGN 4,130.
The social security contributions are divided and paid into several funds such as pensions, unemployment, general illness or maternity funds and others.
Insurers pay contributions through payment orders to the respective accounts of the state social insurance for the various funds. To successfully transfer the insurance, foreign employee needs a Personal Number of Foreigner (PNF), which is issued by the National Revenue Agency.
According to the Bulgarian legislation any person, in its capacity as employer, is obliged to withhold and pay on a monthly basis advance tax for its employees by the 25th day of the month following the month in which the remuneration is paid. The tax rate is 10%. The employer should pay the tax withheld for each employee to the competent National revenue agency (NRA) directorate.
Social security contributions are made on a monthly basis. The portion of the contributions which is payable by the employee is deducted by the employer from the employee’s monthly salary and, together with the employer’s portion, paid to the National Revenue Agency.
The A1 form is issued upon request, after submitting the necessary documents. Once the submission is done, the competent authorities review the existence of a ground for issuance. If additional information is needed, additional documents may be required during the inspection. The duration of the procedure is 30 days from the submission of the request, unless the request is not submitted through the right territorial agency, in which case the deadline is 45 days. The rejection to issue the A1 form may be appealed.
The A1 form is issued for the period indicated in the request, corresponding to the period of the business trip abroad, but not more than 24 months.
The employer is obliged to deduct, pay and report these contributions on behalf of the employee from their income on a monthly basis.
Health insurance contributions are calculated from the income and the calculation base is multiplied by the applicable rate.
For January–March 2025, the minimum base is BGN 933, and the maximum is BGN 3,750.
For April–December 2025, the minimum base is BGN 1,077, and the maximum is BGN 4,130.
These thresholds apply to the total income of the employee from all employers.
Health insurance contributions are calculated and paid separately from the due tax. 60% of the contributions is covered by the employer and 40% by the employee. The reporting and the deposition of the whole payment is done by the employer.
If a person is employed by multiple employers, all of them are obliged to report and pay health insurance contributions unless the whole income of the employee from all employers is higher than the maximum calculation base. In that case, the employee is obliged to inform the second employer about the amount of the health insurance contributions paid by the first employer so that the other would not deposit contributions over the maximum calculation base.
The contributions are paid and reported monthly and are subject to the yearly reconciliation.
In case the employee is a tax resident tax of Bulgaria and receives income taxable abroad, they are obliged to file an annual tax return in Bulgaria.
The tax return shall be submitted between January 10 and April 30 in the following year after the acquisition of the income. However, this due period may be extended for example when the person deceases – in that case the annual tax return may be filed by the heirs after April 30, but no later than 6 months after the death of the person.
The tax return can be filed electronically, by post or at the territorial department, personally or by an authorized person. The self-insured persons are obliged to file their tax returns only electronically. Representation by a tax adviser and power of attorney is not required.
If there is no double tax treaty, to avoid double taxation the provisions of the local legislation should be applicable. If there is a double tax treaty, which allows the application of a set-off method, the exemption method can be applied if it is more beneficial for the employee. For the purposes of avoiding double taxation, generally, a certificate on the paid tax or similar confirmation is required. Also, a tax return filed in other country after certified translation might be accepted.
To apply for available tax benefits, respective evidence is required. Depending on the respective tax benefit the evidence or documentation may need to be presented to the tax authorities with the tax return.
In general, provided that there is a single employer, and the employee works for them also in another country, the income is attributable to the country where the work is performed.
The employer is obliged to report and pay tax in advance monthly and the tax is also subject to a yearly reconciliation.
The monthly tax is due till the 25th day of the month following the month in which the tax is withheld. In case the annual amount of the tax is higher than the sum of the withheld tax during the year, the employer shall pay the additional amount not later than January 31 of the following year.
If the foreign person is not a resident of Bulgaria, receives income only from an employment contract with no other income and does not use tax benefits, they are not obliged to file for an annual tax return. Employers provide to the National Revenue Agency the information on employment income accrued or paid in favour of employees who are resident persons in another EU member state.
The annual tax return shall be submitted between January 10 and April 30 of the year following the acquisition of the income. However, this period may be extended for example when the person deceases – in that case the annual tax return may be filed by the heirs after April 30, but no later than 6 months after the death of the person.
The tax return can be filed electronically, by post or at the territorial department, personally or by an authorized person. The self-insured persons are obliged to file their tax returns only electronically. Representation by a tax adviser and power of attorney is not required.
An entirely new provision in the Law for amendment and supplement of the Foreigners in the Republic of Bulgaria act introduces “Startup Visa” already in Bulgaria. With this innovation, entrepreneurs coming from countries outside the European Union to start a business in Bulgaria will have a faster opportunity to reside in the country. Whether a person meets the conditions for an entrepreneur is determined by the Expert council at the Ministry of Innovation.
To be issued a “Startup Visa“, an individual shall:
Entitlement to tax benefits is not subject to a minimum value of income having source in Bulgaria. To apply for available tax benefits, respective evidence is required. Depending on the respective tax benefit the evidence or documentation may need to be presented to the tax authorities with the tax return.
In general, provided that there is a single employer, and the employee works for them also in another country, the income is attributable to the country where the work is performed.
A person concealing mandatory contributions for public social security or health insurance in larger amounts than BGN 3,000 shall be punished by imprisonment for up to five years and given a fine of up to BGN 2,000. In case the amount of contributions exceeds BGN 12,000, the time of imprisonment ranges between two and eight years with the threat that either a part or the whole possessions of the perpetrator will be confiscated.
A person who avoids the assessment or payment of tax obligations shall be punished by imprisonment from one to six years and a fine of up to BGN 2 000, in case the size of the tax obligation is more than BGN 3.000. If the amount exceeds BGN 12,000, the time of imprisonment ranges between three and eight years with the threat that either a part or the whole possessions of the perpetrator will be confiscated.
The later reporting or payment of due tax or contributions does not avoid criminal punishment but makes it smaller. If prior to the conclusion of the judicial inquiry at the first instance court the mandatory contributions for public social security or health insurance or the undeclared and unpaid tax obligation is paid into the budget together with the interest thereon, the punishment shall be:
Prepared by: SB Accounting & Consulting | Bulgaria
In Cyprus there are resident and non-resident taxable persons. A tax-resident person is someone who:
Any resident and non-resident person of Cyprus could be liable to taxes in respect of any income acquired from sources inside and outside of the Republic of Cyprus.
For the purposes of calculating the days of presence in Cyprus within one or more periods, any part of the day of presence is regarded as a whole day including day of arrival but not the day of departure.
Split tax residency is acknowledged between more countries within one tax period.
In Cyprus, the tax period is the same as the calendar year.
Based on the local tax system, salaries paid in January for the work performed in December are considered as taxable income of the previous calendar year. Salaries are usually paid at the end of the month when the work has been executed.
In general, the tax base is calculated from the gross income decreased by compulsory social and health insurance contributions withheld by the employer which are for the account of the employee, decreased by non-taxable parts of the income and tax reliefs, if applicable.
The non-taxable value of income may be:
Social security is due by both the employer and employee. For example, the calculation of the social security contributions for the “Pensions” fund is formed as follows:
The reporting and the deposition of the whole payment is done by the employer.
In case the employee is a foreigner, they must receive a personal number from the Immigration Office and then become registered with the Social Insurance Office. In case the employee is a Cyprus citizen, they do not need to issue this personal number as the registration with the Social Insurance Office takes place with the Identity Card of the employee.
Local employers as overseas employers need to register with the Cyprus Social Securities. Both must deduct and pay the social security contributions on behalf of the employee.
Social security contributions are calculated from the income received as all kind of labour remunerations under the Cypriot legislation with several explicit exceptions. The calculation base is multiplied by the applicable rate. The minimum calculation base is on the minimum wage per employee category, whereas in case of EUR 900 and the maximum threshold, the Social Security is calculated on the gross amount of EUR 5,239 which applies to the whole income of the employee from all employees.
The social security contributions are divided and paid into several funds such as pensions, unemployment, training, cohesion and redundancy.
Social security contributions are calculated and paid separately from the due tax. The contributions are paid and reported on a monthly basis and are subject to the yearly reconciliation.
If a person is employed by multiple employers, all of them are obliged to report and pay social security contributions unless the whole income of the employee from all employers is higher than the maximum calculation base. In that case, the employee is obliged to inform the second employer about the amount of the social security contributions paid by the first employer so that the other would not deposit contributions over the maximum calculation base.
The A1 form is issued upon request, after submitting the necessary documents. Once the submission is done, the competent authorities review the existence of a ground for issuance. If additional information is needed, additional documents may be required during the inspection.
The A1 form is issued for the period indicated in the request, corresponding to the period of the business trip abroad, but not more than 24 months.
The rates above could be subject to change.
The employer is obliged to deduct, pay and report these contributions on behalf of the employee from their income on a monthly basis.
Health insurance contributions are calculated from the income whereas the calculation base is multiplied by the applicable rate. The minimum calculation base is EUR 900, and the maximum payable National Healthcare System Tax (NHS or GESY) is EUR 4,770 which applies to the whole income of the employee from all income sources.
Health insurance contributions are calculated and paid separately from the due tax, whereas 2.90% of the contribution is covered by the employer and 2.65% by the employee. The reporting and the deposition of the whole payment is done by the employer.
If a person is employed by multiple employers, all of them are obliged to report and pay health insurance contributions unless the whole income of the employee from all employers is higher than the maximum calculation base of EUR 180,000 which is the NHS / GESY tax ceiling (maximum amount payable is EUR 4.770 (180,000 x 2.65%). In that case, the employee is obliged to inform the second employer about the amount of the health insurance contributions paid by the first employer so that the other would not deposit contributions over the maximum calculation base. For example, in case the income of the employee from the first employer is higher than EUR 4,770 the second employer would not pay health insurance contributions.
The contributions are paid and reported monthly and are subject to the yearly reconciliation.
In case the employee is a tax resident of Cyprus and receives income taxable abroad, they are obliged to file an annual tax return in Cyprus.
The tax return shall be submitted by July 31 of the following year after the acquisition of the income.
The tax return can be filed only electronically. Representation by a tax adviser and power of attorney is not required as in order to obtain access to the “taxisnet” system certain applications must be submitted to the income tax office by the accountants or the taxpayers.
If there is no double tax treaty, to avoid double taxation the provisions of the local legislation should be applicable. If there is a double tax treaty, which allows the application of a set-off method, the exemption method can be applied if it is more beneficial for the employee.
For the purposes of avoiding double taxation, generally, a certificate on the paid tax, a tax receipt or similar confirmation is required. Also, a tax return filed in other country after certified translation might be accepted.
To apply for available tax benefits, respective evidence is required. Depending on the respective tax benefit the evidence or documentation may need to be presented to the tax authorities with the tax return.
In general, provided that there is a single employer, and the employee works for them also in another country, the income is attributable to the country where the work is performed.
The employer is obliged to report and pay tax on a monthly basis and the tax is also subject to a yearly reconciliation.
The monthly tax is due till the last day of the month following the month in which the tax is withheld. In case the annual amount of the tax is higher than the sum of the withheld tax during the year, the employer shall pay the additional amount.
If the foreign person is not a resident of Cyprus, receives income only from an employment contract with no other income and does not use tax benefits, they are not obliged to file for an annual tax return.
The annual tax return shall be submitted by July 31 of the year following the acquisition of the income. However, this period may be extended if the government is undergoing significant changes in its “taxisnet” system or actual tax return form. Extensions are granted according to the government.
The tax return can be filed only electronically. Representation by a tax adviser and power of attorney is not required as in order to obtain access to the Cyprus tax system called “taxisnet” certain applications must be filled in by the accountants or taxpayers.
Entitlement to tax benefits is not subject to a minimum value of income having source in Cyprus. To apply for available tax benefits, respective evidence is required. Depending on the respective tax benefit the evidence or documentation may need to be presented to the tax authorities with the tax return.
In general, provided that there is a single employer, and the employee works for them also in another country, the income is attributable to the country where the work is performed.
A person concealing mandatory contributions for public social security, assessment or payment of tax obligations will be subject to criminal offense. If a legal person is found guilty liability extends to the directors and any officer who had duties in relation to the payroll functions of the legal person (company).
The offences are punishable with a fine of up to EUR 17,860, imprisonment for up to five years or both.
Prepared by: CYAUSE Audit Services | Cyprus
An individual is considered a Czech tax resident if:
Tax residence is crucial for the determination of the extent of taxation in each country. A Czech tax resident is obliged to report his worldwide income in the Czech Republic, i.e. including income from sources abroad. In contrast, a Czech tax non-resident in the Czech Republic is only obliged to tax income from sources in the Czech Republic (e.g. for income from employment, days physically worked in the Czech Republic).
For the purposes of calculating the days of presence in the Czech Republic within one or more periods, any part of the day of presence is regarded as a whole day (including day of arrival and day of departure).
An individual may be considered a split tax resident if they move their permanent place of residence during the year.
Should an individual be also regarded as a tax resident in another country based on the other country’s domestic law, the double tax treaty determines their final tax residency status based on the following tie breakers:
Based on the Czech legislation, the following types of income are subject to taxation:
All forms of remuneration, whether in cash or in other forms, are generally considered taxable income (with the exception of certain tax-exempt income / benefits).
For each type of income, the legislation states calculation of the tax base.
A specific group of income from dependent activities are employee benefits, such as:
In the Czech Republic, the tax period is the same as the calendar year. Based on the local tax system, salaries paid in January for the work performed in December are considered as taxable income of the previous calendar year.
The standard tax rate of 15% applies to all types of income up to CZK 1,676,052(approx. EUR67,042) for 2025. The tax rate of 23% applies to all types of income exceeding this amount.
The tax on income from dependent activities is deducted and paid by the employer through the payroll. Selected categories of employee benefits are not considered taxable income. These are, for example, some non-monetary benefits up to half of the average wage for the whole calendar year (CZK 23,278 for 2025), contributions to retirement savings products or meal vouchers and meal cash allowance up to CZK 123.90 for 2025.
The basis of the tax on dependent activity is simply gross salary plus taxable benefits. For other types of income, expenditures can be claimed.
In order to reduce the tax base and tax liability, employees can take advantage of the tax benefits listed in the following table. Tax reliefs and tax allowances directly reduce tax liability. Tax base deductible items then reduce the tax base. Some tax reliefs can be applied monthly, other tax benefits are applied only on an annual basis. Tax residence also has an impact on the application of tax benefits.
| Tax reliefs | Amount/year | Conditions |
|---|---|---|
| Taxpayer relief | CZK 30,840 | applicable for everyone |
| Spouse relief | CZK 24,840 | spouse / registered partner living with the taxpayer in common household |
| Disability relief | CZK 2,520 | for first or second degree of disability |
| Relief for the holders of disability card | CZK 16,140 | card of person with disabilities |
| Allowance on 1st, 2nd, 3rd or more dependent children | CZK 15,204 | child lives with the taxpayer in a common household |
| Donation for charitable purposes including blood donation | max. 15% of tax basement CZK 3,000 per blood donation | at least 2% of tax basement, minimum CZK 1,000 (in total) |
| Mortgage interests | Max CZK 300,000 per a household (for mortgages concluded before 1 January 2021) | interest on building savings, mortgage loans or related contracts direct contractor apartment, land or building ownership, cooperative share
|
| Max CZK 150,000 per a household (for mortgages concluded after 1 January 2021) | ||
| Pension Insurance Contributions* | Max CZK 48,000 | from 1 January 2024: Payment of insurance benefits after 120 months and at the earliest in the year of reaching the age of 60 years. until 30 June 2024: The tax base deduction is applicable from the amount exceeding CZK 12,000 of the contributions paid (up this amount a state subsidy is applicable). from 1 July 2024: Only contributions above CZK 1,700 are considered for the deduction. |
| Life Insurance Contributions * | payment of insurance benefits after 60 / 120 months and simultaneously not earlier than on 60 years of age (unless the insured amount is agreed). | |
| Long-term investment product (DIP) | payment of insurance benefits after 120 months and simultaneously not earlier than on 60 years of age. | |
| Long term care insurance | Dependency of the insured corresponding to dependency level III or IV according to the legislation regulating social services. Not applicable if the insurer may terminate the contract later than 2 months from the date of its conclusion, or may terminate it on the basis of notification of the occurrence of an insurance event, or has the right to change the amount of the insurance premium depending on the age or health status. |
*Please note that in case of pension insurance / life insurance contributions paid to insurance company seated outside the Czech Republic, all related documents need to be translated into Czech (if not issued in Czech). As tax deduction can be applied contributions paid to an organization within EU.
In the Czech Republic, social security is paid by both the employee and employer, while the employer is obliged to register the employee at the local social security authorities (even if it is a foreign employer).
The assessment base for the social security is the gross total taxable employment income. Although there is no minimum calculation base, but the maximum value is set to CZK 2,234,736 for 2025 (in 2024, this value was CZK 2,110,416). It is settled as an annual amount.
In case the employee works for multiple employers, the maximum assessment base for social security has to be followed by all of them, separately. If the cap is reached, the employee may ask the Czech Social Security Authority for refund of overpayment after the end of year.
The contributions are calculated and paid separately and not included in the due tax. In case the employee is employed by 2 or more employers, all employers are obliged to report and pay social security contributions.
The reporting and payments are made by the employer on a monthly basis within the payroll agenda.
Upon request, the Czech authorities issue A1 forms in case of posting to other countries easily, even for a longer period (e.g. 1 or 2 years) under the Art. 12 of the EU regulation 883/2004, if the employee travels abroad regularly or often due to different activities.
On the other hand, a foreign employee is not subject to the Czech insurance system if they submit an A1 form confirming participation in a foreign insurance system issued by a foreign authority.
Therefore, health insurance is paid by both the employee and employer, but it is the employer’s obligation to register the employee at the local health insurance institute (even if it is a foreign employer).
The assessment base for health insurance is the gross total taxable employment income, with no minimum or maximum calculation base.
The contributions are calculated and paid separately and not included in the due tax.
In case the employee is employed by 2 or more employers, all employers are obliged to report and pay health insurance contributions on a monthly basis within the payroll agenda.
The practice of issuing A1 forms and the recognition of forms issued by a foreign authority was described in the previous section.
In general, employment of EU citizens and their family member is usually easy. EU citizens are covered by one of the fundamental freedoms of the internal market, namely the free movement of workers. EU citizens have the right to move and reside freely within the EU Member States. They can therefore reside and work in the Czech Republic without the need for any permit, i.e. they enjoy the same treatment as citizens of the Czech Republic. They therefore do not need a work permit. In relation to residence, EU citizens can apply for a registration certificate, while their family members must apply for a temporary residence permit if they will be staying in the Czech Republic for more than 3 months.
A spouse, registered partner, parent of an EU citizen under the age of 21, child under the age of 21 of an EU citizen, ancestor or descendant dependent on care and nutrition or a foreigner in a permanent partnership with an EU citizen are considered to be a close family members of the EU citizen.
When employing EU citizens, the employer has information obligation and the obligation to keep records of EU citizens (obligation to register certain personal data about the foreigner).
If an employer employs an EU citizen, they have the following information obligation:
Unlike EU citizens, the Employment Act does not provide foreigners with any priority status or the same rights as citizens of the Czech Republic. Third-country nationals must have at the same time a residence permit and a work permit. Both conditions must be met before performing work in the Czech Republic. In order for a foreigner to be employed, they will need to hold one of the following qualifications:
In some cases, it is not necessary for a third-country national to have a work permit in addition to a residence permit. These are cases of so-called free access to the labour market.
If a foreigner meets one of the conditions for obtaining it, only a residence permit (e.g. non-dual employment card, permanent residence card) is sufficient for employment. The most often cases are the permanent residency, a full-time student in an accredited program at a university, posted as part of a transnational provision of services in the EU, a long-term resident for the purpose of family reunification, or, for example, a graduate of a Czech accredited university.
Free access to the labour market is now also granted to persons from selected countries. These are citizens of the Commonwealth of Australia, Japan, Canada, the Republic of Korea, New Zealand, the Republic of Singapore, the United Kingdom of Great Britain and Northern Ireland, the United States of America, or the State of Israel.
As with the employment of EU citizens, employers have almost the same obligations:
If an EU citizen decides to stay in the Czech Republic for more than 30 days, they are obliged to report their place of residence at the relevant Foreign Police office within 30 days of entering the territory. A citizen or their family member is fined up to CZK 3,000 for failing to report to the Foreign Police.
If an EU citizen or their family member changes residence in the Czech Republic and this change is for a period longer than 180 days, they must notify the change of residence within 30 working days from the day the change occurred. Failure to comply with this obligation imposes a fine of up to CZK 3,000 on the citizen or their family member.
Generally, an employee is liable to file a Czech personal income tax return if their taxable income exceeds the amount CZK 50,000 during a calendar year. However, if they only have employment income and no other income exceeding CZK 20,000 or CZK 50,000 from occasional activities/other income throughout the year, they may request the employer to perform the annual tax reconciliation on their behalf. However, this needs to be done before February 15.
The tax return is due 3 or 4 months after the end of the tax period, so that is usually April 1 (in paper form) or May 1 (electronically via data mailbox) of the year following the tax period, or July 1 if the tax return is filed by a tax advisor based on a power of attorney. The deadline for filing may be extended by further 3 months, or until November 1 in case there is a foreign income.
The tax return can be filed by post or online, which is mandatory if the employee or tax advisor has a data box. Otherwise, they would risk penalties imposed by the tax authorities. Representation by a tax adviser or power of attorney is optional.
In case there is an applicable double tax treaty, which allows the application of the set-off method, the employee can apply exemption method based on local legislation if it is more beneficial, but under the assumption that the employment income has been already taxed in the contracting state, and the employer is either a resident of the contracting state or the income is borne by their permanent establishment located in the contracting state.
In practice a confirmation of the tax paid abroad is needed, issued by the foreign tax authority – especially in case of the tax credit method. In case of exemption method, a simple confirmation of income or the copy of the foreign personal income tax return is accepted.
In case there is no double tax treaty is applicable, the tax paid abroad can be deducted from employment income.
A Czech tax resident has the opportunity to claim all the tax benefits listed above if the conditions are met. In most cases, it is necessary to provide the tax administrator with the relevant document proving the right to claim the relevant tax benefit. The documents may be required to be submitted to the tax office together with the tax return.
Assuming that the employee has one employer for whom they also work in another country, the income is taxed in each country according to the relative number of working days. This may also apply to paid leave (provided for a calendar year), holidays and sickness benefits, bonuses, etc. In the tax return, the employee reports their worldwide income, including foreign income which is exempt from taxation in the Czech Republic.
If the seat of the employer is registered in the Czech Republic, they are obliged to report and pay tax on a monthly basis. This obligation is also applicable in case they are registered in another EU member state, but their branch or permanent establishment is located in the Czech Republic or they have an employee with place of work in the Czech Republic.
Generally, filing the tax return is the personal liability of the employees, the employer cannot file the tax return for them. Employees are obliged to file a tax return mostly in the following cases regardless of their residency:
Czech tax non-residents may file a tax return if they want to apply for other tax benefits, as on a monthly basis only the basic taxpayer relief may be applied. The only condition is that they have to have more than 90% of their total worldwide income taxable in the Czech Republic.
The employer can process the annual payroll tax reconciliation provided that the employee does not have the liability to file the personal income tax return.
The tax return is due 3 months after the end of the tax period, so that is usually April 1 of the year following the tax period or May 1 if the employee has a data mailbox, and July 1 if the tax return is filed by a tax advisor. Therefore, the deadline for filing may be extended by further 3 months, or until November 1 in case there is a foreign income.
The tax return can be filed by post or online, which is mandatory if the employee or tax advisor has a data box. Representation by a tax adviser or power of attorney is optional.
Entitlement to tax benefits is subject to condition of having at least 90% of the total income from sources in the Czech Republic. Depending on the respective tax benefit, the evidence or documentation may need to be presented to the tax authorities with the tax return.
Provided that there is a single employer and the employee works for them also in another country, the income is attributed based on the prorate of working days. This may concern, especially, the paid vacation (granted for calendar year), state holiday and sickness, bonuses and benefits.
Evasion of taxes, fees and similar compulsory payments is provided for under sections 240 and 241 of the Czech Criminal Code. This offence is punishable by imprisonment for 2 to 10 years, depending on the scope of the offence and further circumstances of the case. Alternative punishments may be also applied. Furthermore, if the incorrect reporting of tax to the revenue service is due to distortion of data on status of management and assets (accounting books) provided for in section 254 of the Czech Criminal Code, further punishment may be imposed.
The Czech Criminal Code does not specifically regulate reporting, although intentionally misleading reporting may be considered an attempt to commit a criminal offence. For this reason, the criminal qualification for this offence is equal to the previous point above.
The concept of effective regret applies to the later reporting or payment of due tax, social security or health insurance contributions. In that liability the offence of tax evasion under sections 240 and 241 expires, if the offender satisfies the obligations additionally, prior to the enunciation of a judgement of the court of law.
Prepared by: Accace | Czech Republic
Individuals are regarded as Estonian tax residents if:
If under the rules of any double tax treaty the individual is resident of the other treaty country, then that individual will be taxed as a non-resident regardless of the Estonian domestic tax residence criteria.
The tax residency is not based on formal requirements, as the actual situation is analysed by the tax authorities.
The individuals are required to notify the tax authorities about the shift of tax residency both upon the arrival to and the departure from Estonia, by submitting the application form R to the tax authorities.
For the purposes of calculating the days of presence in Estonia within one or more periods, any part of the day of presence is regarded as a whole day (including day of arrival and day of departure).
An individual may be considered a split tax resident if they move their permanent place of residence during the year.
In Estonia, the tax period is the same as the calendar year. Based on the local tax system, salaries paid in January for the work performed in December are considered as taxable income of the next calendar year.
The tax base is calculated from the annual income reduced by the deductions provided by the local law. The fringe benefits are taxable at the level of employer monthly and are not included in the tax base of the individual.
The tax base is calculated from the annual income reduced by the deductions provided by the local law. The fringe benefits are taxable at the level of employer monthly and are not included in the tax base of the individual.
The employee submits an application to the employer in respect of the applicable monthly non-taxable amount of income. In 2025, the non-taxable amount of the income of the resident individual is EUR 7,848 in case the annual income does not exceed EUR 14,400. As a general rule, above taxable income of EUR 25,200 annually, the non-taxable amount ceases.
However, the general non-taxable amount of the income is not applicable to individuals who have reached the retirement age (in 2025, individuals born before 1 January, 1961). If the individual reaches the retirement age during the taxation period, then regardless of the annual income derived, the non-taxable amount equal to old-age pension (EUR 9,312 annually) will be applicable to that individual from the 1 January of the respective calendar year.
The final adjustment of non-taxable amount of the income is made in the annual income tax return.
For resident individuals the following deductions are allowed to decrease their tax bases:
In 2025, a resident individual may deduct in the annual income tax return special training expenses, gifts and donations in the total amount of EUR 1,200, but not more than 50% of the taxable income during the same period of taxation.
The above referred non-taxable amounts and deductions are available also to non-resident individuals who are tax residents of other EU or EEA countries. Under certain conditions the employer is allowed to apply the non-taxable amount of the income in the monthly payroll taxation of such non-residents.
For other non-residents, only unemployment insurance contributions are deductible.
Social tax covers the public pension and health insurance contributions.
The employees are registered in the employment register of the Tax and Customs Board. Therefore, their information is available for other authorities while the institution has information regarding both tax and social security at the same time.
Thanks to an online administration system, the information is often exchanged automatically.
In case a local employer has not paid payroll taxes and declared a taxable salary, employees have to include such income to their personal income tax returns. In case of a foreign employer, if the salary is subject to taxation in Estonia, the foreign employer is obliged to register itself as a non-resident employer with the Tax and Customs Board and proceed the same obligations as the local employer.
The social security contributions are calculated from the gross salary and paid or withheld only by the employer in Estonia. In 2025, the minimum monthly calculation base for social tax is EUR 820.
Employer pays monthly 33% social tax on the gross salary. Employer’s unemployment contribution is 0,8% (payable on gross salary) and employee’s unemployment contribution is 1,6% from the gross salary (withheld by the employer).
If the Estonian resident employee has joined the funded pension scheme, then the employer is liable to withhold monthly 2%, 4% or 6% funded pension contributions from the gross salary of the employee.
If the employee is employed by 2 or more companies, generally all employers are obliged to report and pay social security contributions monthly.
The employer (either local or non-resident) is required to declare and transfer withheld employment-related taxes to the bank account of the Tax and Customs Board not later than by the 10th day of the month following the month during which the payment was made.
A1 forms for the purposes of the Art. 12 of the EU regulation 883/2004 are generally issued only for the duration of each respective posting, for up to 2 years.
A1 forms for the purposes of the Art. 13 or 16 of the EU regulation 883/2004 may be issued for period of up to 2 years.
The Estonian Social Insurance Board issues the A1 forms in case of posting employees to other countries easily, as there is an electronic application procedure available, and the A1 form is generally issued on the following working day after submitting the application.
In Estonia, public health insurance contributions are included in the social tax. Therefore, there is no additional rate and public health insurance contributions are paid monthly within the social tax, which also includes the calculation base of the health insurance. In addition, under the employer’s private health insurance agreement with any insurance company operating in Estonia, the employer can make voluntary health insurance contributions without fringe benefit taxes, if the annual contribution (considering total sporting and health expenses) for the employee will not exceed EUR 400.
Under certain conditions, foreign employment income may be tax exempt in Estonia, but should be declared for information purposes in the personal income tax return. Submission of an annual tax return is not required, if the income of the individual is not subject to additional income tax (except some special cases) or the total income did not exceed the basic tax exemption (up to EUR 7,848 per annum).
The due date for the tax return falls on April 30 and it cannot be extended. The final income tax payment is due on October 1 thereof.
The tax return can be filed personally online in the e-MTA portal, at the tax board office or by post. Representation by a tax adviser and power of attorney is not required.
If an individual receives income for working in a foreign state, then it is exempt from Estonian income tax, if all the following conditions are met:
1) the individual has stayed in the foreign state for the purpose of employment for at least 183 days over the course of a period of 12 consecutive calendar months; and
2) the respective income has been the taxable income of the individual in the foreign state and if this is certified and the amount of foreign income tax is indicated on the certificate (even if the amount is zero).
If there is no double tax treaty applicable, the credit or exemption method can be applied.
In case a double tax treaty is applicable, which allows the application of a set-off method, employees can apply the exemption method if it is more beneficial to them.
If more income tax is paid or withheld in a foreign state than prescribed by the double tax treaty or other international agreement, only the mandatory payable part of the income tax from the foreign state may be deducted from income tax payable in Estonia. For that, the employee needs to have a certificate issued by the foreign tax administrator or withholding agent certifying the payment of income tax or tax withheld in the foreign country. When so requested by the tax authorities, that certificate should be submitted to the tax authorities as a document of proof.
To apply for available tax benefits respective evidence is required, which may need to be presented to the tax authorities with the tax return, if so requested by the tax authorities.
Provided that there is a single employer, and the employee works for them also in another country, the income is attributed based on the prorate of working days. Generally, the payroll income is taxed by the employer in Estonia, unless the employer has a permanent establishment in another country, or the employer has a certificate from the foreign tax authorities that the remuneration paid is subject to foreign income tax.
Employment-related taxes need to be paid and declared monthly by the employer and the personal tax return of the employee is submitted on an annual basis, unless the employee has no other income. For Estonian payroll taxation, generally foreign companies with employees in Estonia should be registered as non-resident employers with the Tax and Customs Board.
In case the employer (foreign or local) had paid and withheld employment-related Estonian taxes, such data is generally included in the pre-filled tax return of the employee.
The employer is required to transfer the withheld employment-related taxes to the bank account of the Tax and Customs Board no later than by the 10th day of the month following the month when the payment was made.
The same deadline is applicable also to the tax return.
The personal income tax return (i.e., the annual tax return of the employee) has to be submitted no later than by April 30. The deadline cannot be extended. The final income tax payment is due on October 1 thereof.
The tax return can be filed personally online in the e-MTA portal (if the individual has received digital ID in Estonia), at the tax board office or by post. Representation by a tax adviser and power of attorney is not required.
To apply for available tax benefits respective evidence is required, which may need to be presented to the tax authorities after the submission of the tax return, if requested so by the tax authorities.
The tax benefits of resident individuals (within established limits) are available also to non-resident individuals who are tax residents of other EU or EEA countries. For other non-residents, only unemployment insurance contributions are deductible.
Provided that there is a single employer, and the employee works for them also in another country, the income is attributed based on the prorate of working days.
The Social Insurance Board confirms that the A1 form can be applied for retroactively. If this has triggered unpaid employment taxes in Estonia, the sanctions mentioned in “Penalties related to tax” may be due.
In Estonia, there is no special registration related to social security and health insurance contributions, therefore there is no special penalty.
The failure to submit information or the submission of incorrect information to tax authorities for the purpose of reduction of an obligation to pay tax or obligation to withhold, or increase a claim for refund, if a tax liability or obligation to withhold is thereby concealed or a claim for return is unfoundedly increased by an amount corresponding to or exceeding major damage, is punishable by a pecuniary punishment or imprisonment for up to five years.
The same act, if a tax liability or obligation to withhold is thereby concealed or a claim for refund is unfoundedly increased by an amount corresponding to particularly great damage, is punishable by one to seven years of imprisonment.
In such case, the court may also impose extended confiscation of assets or property acquired by the criminal offence.
Please note that companies are subject to a fine, not imprisonment.
Prepared by: Numeri OÜ | Estonia
In Greece, a person is regarded a tax resident if they fulfil formal and material requirements, such as:
The tax residency is not based on formal requirements, as the actual situation is analysed by the tax authorities. The individuals are required to register their Greek tax residency with the tax authorities.
For the purposes of calculation of the days of presence in Greece within one or more periods, any part of the day of presence is regarded as a whole day (including day of arrival and day of departure).
Split tax residency is not acknowledged between more countries within one tax period.
In Greece, the tax period is the same as the calendar year. Based on the local tax system, salaries paid in January for the work performed in December are considered as taxable income of the previous calendar year. However, a salary paid after January is regarded as taxable income of the next year, even if it concerns the previous year.
Generally, the tax base is calculated from the gross income (money and in-kind), which is decreased by social and health contributions paid by the employee decreased by the non-taxable parts of the income, if applicable.
Incomes are taxable from the first euro, but there are some tax credits based on the value of income (ceasing with high incomes) and the number of children.
In order to decrease the tax base, the following deductions are allowed:
Employees must be registered after their very first employment. Also, the employee needs to register as an insured person for health insurance.
A local employer is obliged to register the employee, then deduct and pay the respective contributions on behalf of the employee and the employer´s part. When it comes to foreign employers, only the employment relationship is registered, while the employee is responsible for the payments to the social authorities.
Social security is calculated from the gross taxable income without accord to social and health contributions decreasing the tax base, whereby a maximum base is applicable. It is calculated on the monthly basis, from the monthly salary.
The maximum calculation base is currently EUR 7.572,62.
Social security contributions are calculated and paid separately from the due tax, as they are separate systems from tax. Although the contributions are paid both by the employee and the employers, the reporting and payment is done by the employer on a monthly basis. In case there are more employers, all of them are obliged to report and pay.
A1 forms for purposes of the Art. 12 of the EU regulation 883/2004 are generally issued only for the duration of each respective posting. A1 forms for purposes of the Art. 13 or 16 of the EU regulation 883/2004 may be issued for period of 1 to 2 years. Greek authorities do a thorough check of documents and conditions before issuing A1 form. Therefore, it may be lengthy process.
The health insurance contributions are covered by the social security contributions. However, employees must register for health insurance as an insured person.
Health insurance contributions are calculated from the gross taxable income (in-kind included). The same maximum calculation base is applicable as in the case of social security, i.e. EUR 7,373.53 per month.
Although the contributions are paid both by the employee and the employers, the reporting and payment is done by the employer on a monthly basis.
Employee with income taxable abroad is obliged to file income tax return, while a yearly tax reconciliation by the employer is not allowed.
The due date for the tax return falls on June 30 and it cannot be extended, unless the ministry amends the deadline.
The tax return can be filed only online. Representation by a tax adviser is voluntary but requires a signed power of attorney.
If there is no double tax treaty, then only the exemption method is applicable, however only in case the income from employment was taxed in such other country.
In case a double tax treaty is applicable, which allows the application of a set-off method, the employee can apply the exemption method, if the income was taxed abroad and it is more beneficial to them.
For the purposes of avoiding double taxation, generally, a certificate on the paid tax or similar confirmation is required. In exceptional cases other evidence may be accepted.
To apply for available tax benefits respective evidence is required. Depending on the respective tax benefit the evidence or documentation may need to be presented to the tax authorities with the tax return.
More specifically:
Employees relocating to Greece from abroad may benefit from a 50% reduction on their employment income tax for a period of 7 years, provided they meet specific relocation and employment criteria.
Certain benefits provided by employers are not considered taxable income for employees, such as:
Favourable tax treatment applies to stock options and free shares granted under specific employee schemes, subject to holding periods and conditions set by law.
Greece offers residency and tax benefits to foreign digital nomads and remote employees, including a 50% tax break under certain relocation scenarios.
Employees can receive tax credits by making electronic payments for specific services (e.g. energy upgrades, home maintenance, health services), deductible from their taxable income.
In general, the income is attributable to the country where the work is performed. If the income or its part cannot be attributed to one country as a whole, then a ratio based on respective time worked in Greece and other countries is applied. Individual parts of income may need individual evaluation and attribution ratio as they may concern different time periods or situations; this may concern especially paid vacation (provided for a year of work), state holiday, sickness, bonuses and benefits.
The employee is obliged to file for tax return only if there are additional sources of income. The employer is obliged to report and withhold tax on monthly basis. Withheld tax and the monthly report of the employer is due within two months after the month concerned. A yearly report is not required.
The due date for the tax return falls on June 30 and it cannot be extended, unless the ministry amends the deadline.
The tax return can be filed only electronically. Representation by a tax adviser is voluntary but requires a signed power of attorney. However, tax residents of other countries need a local tax representative for deliveries from tax authorities.
Entitlement to tax benefits is subject to condition of having at least 90% of the total income from sources in Greece. Depending on the respective tax benefit, the evidence or documentation may need to be presented to the tax authorities with the tax return.
In general, the income is attributable to the country where the work is performed. If the income or its part cannot be attributed to one country as a whole, then a ratio based on respective time worked in Greece and other countries is applied. Individual parts of income may need individual evaluation and attribution ratio as they may concern different time periods or situations; this may concern especially paid vacation (provided for a year of work), state holiday, sickness, bonuses and benefits.
There is no special penalty in Greece related to A1 forms. However, a missing A1 form may lead to negative implications and penalisations abroad.
Similarly, a foreign employee working in Greece without an A1 form may lead to following implications:
If the purpose of incorrect reporting or missing payment of due tax, social security and health insurance contributions is to avoid or decrease them, it is regarded as a criminal offence. The penalty depends on the value of the missing payment and may be at least 3 years of prison. Their later reporting or payment avoids criminal punishment.
Criminal penalisation may concern also the employer – as legal entity. There are different penalties applicable, e.g. money penalty, ban of activity, cease of assets.
Prepared by: Atlas Consulting PC | Greece
In Hungary, a tax resident is:
For the purposes of calculation of days of presence in Hungary within one or more periods, any part of the day of presence is regarded as whole day (including day of arrival and day of departure).
Split tax residency is acknowledged between more countries within one tax period. Although according to the Hungarian law and OECD treaties, in a certain point of time the person can be resident in only one place, but the residency can be changed within a tax period. In lack of a double tax treaty, dual residency may occur.
The tax period is the same as the calendar year. Based on the local tax system, salaries paid till January 10 for the work performed in the previous year are considered as taxable income of the previous calendar year. If paid after the 10th day, even if it concerns the previous year, the salary is regarded as a taxable income of the following year.
The tax base is calculated from all the revenue (monetary and in-kind) decreased by non-taxable parts of the income, if applicable – such as tax base allowances based on family status. Other possible deductions are allowances for newlyweds, for young people under the age of 25 years, for young mothers under the age of 30, allowances granted to mothers raising four or more children, personal allowance for handicapped private individuals, etc.
The registration of the employee including any other further changes and the payments of contributions of the employee and the employer´s part is done by the employer. This applies also to foreign employers.
The social security base is calculated on a monthly basis, from the monthly salary and other incomes. The salary should be not less than minimum wage or guaranteed minimum wage, in case of full-time employment (in 2025 HUF 290.800 and HUF 348.800).
Social insurance contributions in Hungary are not covered by due tax, therefore they are calculated and paid separately on a monthly basis. The reporting and payment of the contributions are done by the employer, including foreign employer. If the employee is employed by 2 or more employers, all of them are obliged to report and pay the contributions.
In case the employee is under a foreign social security, the social contribution tax is not payable by the employer, neither are the health care and pension contributions payable by the employee.
A1 forms for purposes of the Art. 12 of the EU regulation 883/2004 are generally issued only for the duration of each respective posting. The Hungarian authorities do a thorough check of documents and conditions before issuing A1 form. Therefore, it may be lengthy process.
The health insurance contributions are covered by the social security contributions. However, employees must register for health insurance as an insured person.
Health insurance contributions are calculated from the gross taxable income (in-kind included). No maximum threshold.
Although the contributions are paid both by the employee and the employers, the reporting and payment is done by the employer on a monthly basis
According to general rule, the employee is obliged to file the tax return. The due date for filing falls on May 20 with the possibility of extension, however, the tax office needs to be notified beforehand. Application for justification may not be refused if the private individual has any income from abroad, and in this case penalty for the delay in filing may not be imposed until November 20.
The tax return can be filed electronically, in written form by post or personally. However, entrepreneurs are obliged to communicate with the tax authorities electronically. The easiest way of filing the tax return for individuals is to opt for registering at the Client Gate. If they do so, the Hungarian Tax Authority will send them their draft tax return after March 15. In this case, the employee will be able to check and, where necessary, modify, amend or accept the draft tax return.
Representation by a tax adviser is voluntary, but it requires a signed power of attorney.
If there is no double tax treaty, then only the tax-credit (set-off) method is applicable. The calculated tax shall be reduced by 90% of the tax paid on the income abroad (except refundable tax), but not more than the tax calculated for this income by the Hungarian tax rate. In case of some specific incomes, other tax-credit rules apply.
If there is a double tax treaty, the applicable method (exemption or set-off) depends on the rules of the concerned treaty.
In order to apply the respective methods, a certificate on paid tax or similar confirmation is required. In exceptional cases tax return filed in such other country may be accepted.
To apply for available tax benefits respective evidence is required. Depending on the respective tax benefit the evidence or documentation may need to be presented to the tax authorities with the tax return.
In general, the income is attributable to the country where the work is performed. If income or its part cannot be attributed to one country as a whole, then the ratio based on the respective time worked in Hungary and other countries is applied. Individual parts of income may need individual evaluation and attribution ratio as they may concern different time periods or situations. This may concern, especially, the paid vacation (granted for calendar year), state holiday and sickness, bonuses and benefits.
The employer who is considered as a payer i.e. domestic legal entity, branch or commercial agency (excluding non-resident foreign employer) is obliged to report and withhold personal income tax on a monthly basis. The monthly report of the employer is due by the 12th day of the calendar month following the month concerned.
The local or foreign employer do not able to handle the yearly tax reconciliation, as it is the obligation of the employee to file their own annual tax return.
The due date for filing falls on May 20 with the possibility of extension, however, the tax office needs to be notified beforehand. Application for justification may not be refused if the private individual has any income from abroad, in this case penalty for the delay in filing may not be imposed until November 20.
The tax return can be filed electronically, in written form by post or personally. However, entrepreneurs are obliged to communicate with the tax authorities electronically. The easiest way of filing the tax return for individuals is to opt for registering at the Client Gate. If they do so, the Hungarian Tax Authority will send them their draft tax return after March 15. In this case, the employee will be able to check and, where necessary, modify or accept the draft tax return. Representation by a tax advisor is voluntary, but it requires a signed power of attorney.
Entitlement to tax benefits is subject to several conditions. The general rule is that private persons being resident to any EC Member States or any non-EC countries neighbouring Hungary (Ukraine, Serbia) are eligible for tax benefits. Additionally, another requirement is having at least 75% of the total income from sources in Hungary. Depending on the respective tax benefit, the evidence or documentation may need to be presented to the tax authorities with the tax return.
In general, the income is attributable to the country where the work is performed. If income or its part cannot be attributed to one country as whole, then the ratio based on the respective time worked in Hungary and other countries is applied. Individual parts of income may need individual evaluation and attribution ratio as they may concern different time periods or situations. This may concern, especially, the paid vacation (granted for calendar year), state holiday and sickness, bonuses and benefits.
There is no special penalty in Hungary related to A1 forms. However, a missing A1 form may lead to negative implications and penalisations abroad.
Similarly, a foreign employee working in Hungary without an A1 form may lead to following implications:
If the purpose of incorrect reporting or missing payment of due tax, social security contributions is to avoid or decrease them, it is regarded as a criminal offence. The penalty depends on the value of the missing payment and may be at most 10 years of prison. Their later reporting or payment avoids criminal punishment. Criminal penalisation may also concern the employer – as legal entity. Beside imprisonment, penalties may be community service work, fine, prohibition to exercise professional activity, and deprivation of civil rights may be imposed as a form of additional penalty.
Prepared by: Accace | Hungary
An individual is a Latvian tax resident if they meet at least one of these criteria:
Both formal aspects (like declared residence) and practical factors (such as actual presence and personal ties) are considered. Simply having a registered address in Latvia does not make someone a tax resident.
Authorities assess where the person’s main personal and economic interests are—considering family, property, workplace, where social security is paid, usual place of living, and intention to stay. The State Revenue Service may also use criteria similar to OECD tie-breaker rules to determine the strongest connections. Latvian tax residency is determined by both formal registration and substantive links, not just one factor alone.
For the purposes of calculating the days of presence in Latvia within one or more periods, any part of the day of presence is regarded as a whole day (including day of arrival and day of departure). The purpose of this rule is to exempt employment income from Latvian taxation if the employee’s presence is short‑term and remuneration is paid by a non‑Latvian employer without a permanent establishment in Latvia.
Latvia allows for split tax residency. This means that a person can be seen as a tax resident in more than one country in the same tax year. If someone stops meeting the rules for Latvian tax residency during the year, they may be considered a non-resident for the rest of that year. To make split residency official, a person must give documents and an application to the State Revenue Service, such as proof of moving or a foreign tax residency certificate.
Latvia applies a progressive personal income tax rate structure for Latvian tax residents as of 2025:
In Latvia, the tax period is the same as the calendar year.
In Latvia, capital income and capital gains are taxed at 25.5%, with a 20% transitional rate for gains from deals started before December 31, 2024, and completed by 2027.
In addition, a 10% reduce rates applies for small business, rental, timber and scrap metal income; 15% for seasonal agricultural or nomad visa income; and 25% for royalties (2025–2027) if the author is not a registered business operator.
Based on the Latvian tax system, salaries paid in January for the work completed in December are considered as taxable income of the next calendar year.
In Latvia, the Personal Income Tax (PIT) base is the total of all taxable income received in a year, minus allowable deductions. For employees, this includes gross salary, business income (not under a special regime), rental income, royalties, and capital gains. Deductions comprise mandatory employee social security contributions, non-taxable minimums, personal and dependent allowances, and eligible deductions for education, medical costs, private pension contributions, or qualifying life insurance.
From 2025, Latvia applies a fixed non-taxable allowance for residents, with the PIT base further reduced by various deductions:
Annual deductions (via tax return) include:
These deductions are for Latvian tax residents only, unless allowed under a Double Tax Treaty. The remaining taxable income is subject to progressive PIT rates.
Employer benefits may be partly tax-free within set limits:
| Benefit | Tax-free limit | Tax treatment above limit |
|---|---|---|
| Health insurance | EUR 700/year | Fully taxable (PIT + SSC) |
| Private pension contributions (3rd pillar) | 10% of gross income, max EUR 4,000/year | Fully taxable |
| Work-related training | No limit (if provided or reimbursed by the employer) | Taxable if non-job-related |
| Company car (private use) | No exemption | Fully taxable fringe benefit (unless restricted to business use, or employee pays a market-based usage fee for private use) |
| Gifts (e.g. holidays, birthdays) | Up to EUR 100/year | Taxable above limit |
Latvian tax residents earning foreign income from the EU/EEA can avoid double taxation using a Double Tax Treaty, either by exemption or credit method. If most income is taxed abroad, they may still qualify for Latvian deductions if conditions are met. Double tax relief applies either by excluding foreign income (exemption) or crediting foreign tax against Latvian PIT (credit).
Employees can file an annual return to reclaim overpaid tax or claim deductions.
In Latvia, mandatory social security contributions are shared between employer and employee:
Social security contributions in Latvia cover a range of benefits, including state pension (first pillar), unemployment, sickness, maternity and paternity, disability, and accident-at-work insurance. They are paid by both the employee and employer, while the employer is obliged to register the employee at the local social security authorities (even if it is a foreign employer, with a valid A1 certificate) before the employment relationship begins and pay the contribution also on behalf of the employee.
All contributions must be calculated and submitted monthly through the State Revenue Service’s electronic system (EDS), alongside payroll tax reporting.
In Latvia, social security contributions for both employers and employees are subject to an annual cap of EUR 105,300 in 2025. Employers contribute 23.59%, with a portion for accident insurance calculated on the entire salary. A minimum monthly contribution base of EUR 700 applies, even if the actual earnings are lower, unless the employee qualifies for an exemption (for example, students or pensioners). Certain part-time employees may also be exempt under specific rules.
Contributions are calculated on gross employment income, including all salaries, bonuses, and benefits, up to the cap.
If an employee works for multiple employers, each employer must independently register with the State Revenue Service (SRS) and pay social security contributions. These are reported monthly via the SRS Electronic Declaration System (EDS), with payments and payroll reports due by the 23rd of the next month.
All income from all employers is combined to calculate the annual social security cap of EUR 105,300 (for 2025) and progressive income tax rates. Since employers do not know what other employers pay, overpayments may happen and are corrected after year-end reconciliation.
Social security contributions in Latvia are calculated monthly on the previous month’s gross income. Both employer and employee shares are withheld and reported together, but social security (VSAOI) and income tax (PIT) are separate and paid individually. Employers must file monthly payroll reports via the SRS EDS. Employees do not usually report monthly, unless self-employed or a domestic employee of a foreign employer, in which case quarterly reporting applies. Annual reporting is sometimes required, such as for multiple jobs, high income, foreign income, or deductions.
If an employee is covered by a foreign social security system (like with an A1 certificate or bilateral deal), Latvian social security is not due. In these cases, since no VSAOI is withheld, the PIT base is higher, possibly resulting in more tax due unless deductions or treaty relief apply.
The State Social Insurance Agency (VSAA) in Latvia issues A1 certificates for employees temporarily posted to another EU or EEA country, or Switzerland, under EU Regulation 883/2004, Article 12(1). To qualify, the employee must be insured in Latvia, not replacing another posted worker, and the posting cannot exceed 24 months. Applications are typically submitted digitally via the Electronic Declaration System (EDS).
A1 certificates are usually granted for up to two years for temporary postings, project work, or regular business trips abroad, provided the work abroad stays temporary.
If an employee works in several EU countries, Article 13 applies. The VSAA will review whether at least 25% of the work or income is based in Latvia. If so, Latvia remains responsible for social security, especially if the employee’s main employment or residence is in Latvia.
Health insurance is part of the mandatory social security contributions. Once SSC is paid, the employee is entitled to public healthcare coverage under the National Health Service (Nacionālais veselības dienests, NVD).
Although the employees are required to bear the social security contributions and the social contribution tax is paid by the employers, the reporting and payment of both obligations is done by the employer on a monthly basis.
In Latvia, if an employee works solely for one employer and only receives employment income from that source, there is no obligation to file a personal income tax return, as the employer withholds the necessary tax each month. However, a tax return must be filed if the employee has income from abroad, wishes to apply for deductions or reliefs, or earns income from multiple employers or sources. For those earning foreign income, filing is mandatory.
The deadline for submitting the personal income tax return depends on annual earnings. If total income exceeds EUR 105,300, the return must be filed between 1 April and 1 July of the following year. If the income is less than or equal to EUR 105,300, the deadline is from 1 March to 1 June of the following year. It is important to note that there is no option in Latvia to extend the filing period.
Tax returns can be submitted online using the Electronic Declaration System (EDS) or sent in paper form by post. While representation by a tax adviser is not required, it remains an option for those who prefer professional assistance.
If no double taxation treaty (DTT) exists, the credit method may be available to prevent double taxation. Where a DTT is in place and it allows the set-off method, only the method specified in the treaty can be applied. Employees cannot choose the exemption method even if it appears more beneficial.
To apply any double taxation avoidance method, employees must provide supporting evidence, such as foreign tax payment certificates and summaries of employment income.
To apply for available tax benefits in Latvia, employees must provide relevant documentation such as proof of dependents, receipts or certificates for eligible donations, and supporting evidence for education or medical expenses. Notably, donations made to organisations registered in Latvia may reduce the taxable amount.
If an employee works for a single employer in more than one country, Latvia attributes income based on where the work was physically performed. Periods of non-working time, including paid vacation, state holidays, or sickness, are generally allocated using a proportional method. This approach also applies to bonuses and benefits in kind.
For non-resident employees in Latvia, tax reporting and payment obligations are clearly defined. Non-residents must submit their statement by the 15th of the following month. Social security and personal income tax (PIT) statements are due by the 17th, while payment of PIT and social security contributions must be made by the 23rd of the following month.
If a foreign employer registers with the Latvian tax authorities as a withholding agent, they can manage the calculation, reporting, and payment of the employee’s tax obligations. In this case, the employee does not generally need to file a personal income tax return unless they have other taxable income or wish to claim deductions. Similarly, employees working for a Latvian employer have their personal income tax withheld at source and are not usually required to file an annual return unless they have additional income, are eligible for deductions, or want to claim tax benefits.
The deadline for filing a tax return is 1 June (or 1 July for higher earners), which is the same as for Latvian residents. These deadlines are statutory and cannot be extended.
Tax returns can be submitted online through the Electronic Declaration System or sent in paper form by post. Representation by a tax adviser and a power of attorney is not required but is available if desired.
To apply for tax benefits in Latvia, individuals must provide proof of eligible expenses and evidence of Latvian-sourced income. Most tax benefits are available only if the majority of an individual’s income is earned in Latvia.
Donations to Latvian-registered non-governmental organisations, public benefit organisations, and churches are tax deductible, provided they comply with Latvian tax law.
When an employee has a single employer but also works in another country, Latvia allocates income based on the number of workdays physically spent in Latvia. Periods such as paid leave, public holidays, and sick leave are prorated according to the proportion of working days spent in Latvia compared to other countries. Bonuses and benefits in kind follow the same allocation rules.
Incorrect reporting or non-payment of due tax, social security, or health insurance contributions can be considered a criminal offence if it involves fraudulent behaviour or intentional evasion. In such cases, individuals may face penalties including monetary fines, confiscation of property, or imprisonment, depending on the seriousness of the offence. However, voluntary correction and cooperation with the authorities may help reduce or avoid criminal charges.
Prepared by: Numeri SIA | Latvia
Individuals are a tax resident of Morocco if they meet any of these criteria:
Individuals who are not considered to be tax residents of Morocco may still be liable to pay Moroccan income tax on certain types of income, such as income from employment in Morocco or income from real estate located in Morocco. This is because Morocco has entered into a number of tax treaties with other countries, which are designed to avoid double taxation. Under these treaties, the right to tax certain types of income is usually attributed to the country where the income is earned.
Agents of the State who exercise their functions or are charged with a mission abroad are considered to have their tax domicile in Morocco when they are exempt from personal income tax in the foreign country where they reside.
This is a special rule that applies to Moroccan government officials who are stationed abroad. These officials are considered to have their tax domicile in Morocco, even if they are not physically present in Morocco, because they are exempt from paying personal income tax in the foreign country where they reside.
To be considered a tax residence in Morocco, you must stay in stay in Morocco for more than 183 days within any 365 days. Residing in Morocco for than 183 days continuous or discontinuous within twelve months and any part of the day is considered as whole in Morocco including the day of arrival and day of departure.
Split tax residence is possible if the taxpayer resides in several countries during the same tax year. The tax residency is then determined based on international agreements (treaties between countries) in the absence of treaties, the national legislation of Morocco is applied.
Morocco uses a progressive income tax system that vary from 0% to 38%, meaning the tax rate increases as your income rises and the current tax rates in Morocco are the following:
Rate of monthly income, the brackets to be applied:
At higher rates of annual income, the brackets to be applied:
The tax period is the same as the calendar year. Based on the Moroccan tax law, salaries paid in January for the work performed in December are considered taxable income for December. Article 73 CGI
Generally, the tax base is calculated from the net taxable income based on the gross taxable income subtract the salary deductions (non-taxable allowance).
Here are the steps to determine the tax base:
Other extensions according to the local law include the following:
Extension of the income tax exemption period for newly recruited employees until December 31, 2026:
As part of the measures to encourage and support employment and improve the competitiveness of businesses, the 2023 Finance Law (LF) has extended the duration of the income tax exemption for the monthly gross salary capped at MAD 10,000 paid by a company, association or cooperative created during the period from January 1, 2015, to December 31, 2026 and up to a limit of 10 employees.
This benefit is granted, subject to compliance with certain conditions:
Extension of the duration of the income tax exemption for salaries paid for the first recruitments of young people until December 31, 2026, regardless of the date of creation of the company:
In order to continue the action of encouraging the integration of young people into working life, who have not yet held a job, the Financial act of 2023 has extended the duration of the application of the income tax exemption, the salary paid by a company, association or cooperative, regardless of the date of its creation, to an employee on the occasion of his first recruitment, and this, during the first thirty-six (36) months from the date of said recruitment.
This exemption is granted under the following conditions:
There is tax reduction for certain investments and exemption for income.
Social security is paid by both the employee and the employer.
The employer is responsible for deducting the employee’s portion from their salary and paying both employee and employer contributions to the CNSS (National Social Security Fund).
It is mandatory for both the employer and the employee to register with the CNSS (National Social Security Fund).
Local employers: Required to register and pay contributions for all employees.
Foreign employers: Required to register and pay contributions for all employees residing in Morocco.
The CNSS (Caisse Nationale de Sécurité Sociale) is the Moroccan national social security fund. It provides a range of benefits, including pensions, healthcare, and unemployment benefits. The base amount for calculating social security contributions is the employee’s gross salary, including basic salary, bonuses, allowances, and benefits in cash or kind.
The rates to be applied when calculating your contributions are determined by law. Each of the major categories of social benefits is characterized by its own contribution rate. The table below shows the rates for each category, regardless of its activity, except for fishermen:
Table (3): Calculation of the social security contributions
| Benefit category | Calculation base | Employer contribution rate | Employee contribution rate | Total rate |
|---|---|---|---|---|
| 1. Family Benefits | Total actual salaries for the period (month/quarter) | 6.40% | – | 6.40% |
| 2. Short-term social benefits | Total capped salaries (each capped at MAD 6,000) | 1.05% | 0.52% | 1.57% |
| 3. Long-term social benefits | Total capped salaries (each capped at MAD 6,000) | 7.93% | 3.96% | 11.89% |
| 4. Compulsory Health Insurance (AMO) | Total actual salaries for the period (month/quarter) | 4.11% | 2.26% | 6.37% |
| 5. Vocational Training Tax | Total actual salaries for the period (month/quarter) | 1.60% | – | 1.60% |
In case an employee works for several employers, the maximum base amount applies to each employer individually, not to the employee’s total income from all employers.
Foreign employers may be subject to international social security agreements. In such cases, contributions may be due in the employer’s home country.
All employers are required to report and pay social security and health insurance contributions for the employee, regardless of the work duration or number of employers.
Contributions are paid monthly by the employer to the National Social Security Fund (CNSS).
Social security is calculated and paid separately from income tax.
Instead of A1 forms, the Moroccan Social Security authority issues a certificate titled « Demande de détachement dans un autre pays » – Ref.: 350-1-01, which is used in the context of Secondment to Another Country
The health insurance is not separate from the social security in Morocco and it is under the supervision of the CNSS.
Both employer and employee typically contribute to health insurance.
The local employer typically needs to register and pay contributions on behalf of both the employee and employer.
The foreign employer may be required to register and pay contributions in certain cases, such as for seconded workers.
The health insurance contribution base is generally the employee’s gross salary.
In case an employee works for several employers, the maximum base amount applies to each employer individually, not to the employee’s total income from all employers.
Each employer is obliged to register the employee with the CNSS. As the health Insurance deduction is included in the social security contributions, it is paid and reported the same way.
Contributions are generally paid monthly. Reporting is obligatory on monthly basis.
Health insurance is generally calculated and paid separately from income tax.
In the absence of treaty with the country, the national law regarding filling is applied.
The income tax return filing deadline is generally 30 days following the filling month.
Generally, the extension of filing deadline is not possible. However, it can be extended in certain cases, such as for residents abroad and to request an extension, one has to contact the DGI and justify the reason for the request.
The income tax return can be filed online, by mail, or in person at the tax office.
If there is no double tax treaty, these methods for double taxation avoidance can be applied:
If there is a double tax treaty, which allows the application of set-off method:
To apply a double taxation avoidance method, the employee needs to provide documents and evidence, such as a tax residency certificate and a tax return from the other country.
To obtain available tax benefits, the employee needs to provide documents and information, such as expense receipts.
If the employee has one employer and also works for them in another country, the source attribution rules depend on the applicable tax treaty between the two countries. Paid leave, public holidays, sick leave, bonuses, and benefits in kind are generally considered income sourced from Morocco.
Both the employee or the employer are required to declare and pay tax monthly, and the deadline is generally 30 days after the end of the month.
The DPS system allows the employer to declare and pay tax on behalf of the employee.
The income tax return filing deadline is generally 30 days following the filling month.
Generally, the extension of filing deadline is not possible. Unless there is a double tax treaty with the employee‘s country of residence.
The income tax return can be filed online, by mail, or in person at the tax office.
To obtain available tax benefits, the employee needs to provide documents and information, such as expense receipts.
The incorrect reporting of due tax, social security or health insurance contributions, their later reporting or missing payment is not regarded as criminal act but requires correcting the situation and paying penalties and payment interest.
Prepared by: FINACS | Morocco
In Poland, tax residents are natural persons, who:
Fulfilment of one of the above conditions is sufficient to be considered a Polish tax resident.
For the purposes of calculation of days of presence in Poland within one or more periods, any part of the day as a whole day (including day of arrival and day of departure).
Moreover, there should be excluded days spent in the given country travelling between two places outside the country (transit).
Besides this, any full day spent outside the given country, whether on holiday, business or any other reason, should not be taken into account.
Split tax residency occurs when the condition of being tax resident in several countries in one tax period is met.
The tax period is the same as the calendar year.
The tax base is calculated from the remuneration, which is decreased by the statutory cost (provided in the legislation) and additional allowances.
The tax free threshold of income is PLN 30,000.
There is a variety of allowances that decrease the tax base of employees, such as:
Furthermore, 1.5% of the personal income tax can be dedicated for charity.
Among others, the Polish tax benefits are the following:
The rate covered by the employer is distributed the following way:
The due social security paid by the employer is calculated from the gross salary, where:
Each employee has to be registered in the Polish Social Insurance Institute (ZUS) via Płatnik, a special program dedicated for ZUS communication.
A local employer is obliged to register and deduct or pay the respective contributions on behalf of the employee, while foreign employers are recommended to do so, otherwise the employee has to register themselves as the employer in ZUS and sign special documents with the employer. This procedure is more complicated for the employee.
The base of the social security contributions is calculated from the gross salary of the employee, or from the total income which is a base for social security received each month.
The maximum calculation base for social security is the annual limitation for retirement and disability pension insurance for 2025, in the amount of PLN 260,190.
The social insurance contributions are calculated separately, from the employee’ gross salary, but together with the due tax.
In case the employee is employed by 2 or more employers, all employers are obliged to report and pay the health insurance contributions on a monthly basis.
Upon fulfilling some formalities, the authorities issue the A1 forms in case of posting to other countries easily. The forms are generally only issued for the duration of the posting in question, not longer than 24 months.
The contribution is calculated the following way: 9% of the gross salary deducted by the social security contributions.
The health contribution for entrepreneurs taxed under the flat tax and lump-sum tax is calculated in specific ways.
From 2022, it is not possible to deduct health insurance contribution from tax to be pay.
The health insurance contributions are calculated separately, from the employee’ gross salary, but together with the due tax.
In case the employee is employed by 2 or more employers, all employers are obliged to report and pay the health insurance contributions on a monthly basis.
Employee Capital Plans (PPK) is a pension saving system for the employees paying the social security contributions, regardless of the form of employment. This is a universal social program which aim is to increase the financial security of Poles.
For the employer, introduction of this program is mandatory (please see the exemption below). However, the employee’s participation is voluntary. Employees can resign from participation in PPK by signing explicit declaration. If all employees resign and the employer falls within the definition of micro entrepreneur then it is not necessary to introduce PPK.
The contributions to the program are made by the employer, employee and the State in the following amounts:
| Obliged entity | The amount of payment |
|---|---|
| State – welcome contribution | 250 PLN |
| State – annual contribution | 240 PLN |
| Employer – basic contribution | 1.5% of basis of pension and disability insurance contribution |
| Employer – additional contribution | 2.5% of basis of pension and disability insurance contribution |
| Employee – basic contribution | 2% of basis of pension and disability insurance contribution |
| Employee – additional contribution | 2% of basis of pension and disability insurance contribution |
In Poland, the employee is obliged to file an income tax return, but the employer may process the calculation and payment of the due tax too.
A Polish tax resident reports all worldwide income in Poland.
Tax authorities prepare the tax return and it can be replaced by the tax return filed by the employee.
The due date for filing the tax return falls on the end of April, with no possibility to extend the deadline.
The filing can be done online, by post or personally. Representation by a tax adviser and power of attorney is not required.
If there is no double tax treaty applicable, the tax credit method may be applied to avoid double taxation.
If there is an applicable double tax treaty, depending on the particular case, the employee can apply the credit or exemption method depending on the provisions resulting from a double tax treaty. In order to do so, the confirmation of tax payment from a foreign jurisdiction is required.
To apply for available tax benefits respective evidence is required. Depending on the respective tax benefit the evidence or documentation may need to be presented to the tax authorities with the tax return.
In Poland, 1.5% of the paid tax may be donated for charity.
If there is a tax resident of another country and foreign employer at the same time when Poland has
the right to tax, there is no tax remitter and therefore the employee has to settle the tax on their own.
The local employer is obliged to calculate, pay tax and provide information to the employee. As a rule, tax advances are paid till the 20th day of the following month, while social security contributions are paid till the 15th day of the following month. At the end of the year, the employee files the annual tax return, which can be filed online.
The due date for filing the tax return falls on the end of April, with no possibility to extend the deadline.
The filing can be done online or on paper. Representation by a tax adviser and power of attorney is not required.
To apply for available tax benefits respective evidence is required. Depending on the respective tax benefit the evidence or documentation may need to be presented to the tax authorities with the tax return.
In Poland, 1.5% of the paid tax may be donated for charity. In general, the income is attributed to a country based on the rule of 183 days of presence.
The incorrect reporting and payment of due tax, social security or health insurance contributions can be regarded as a criminal act. The applicable punishment is either 5 years in prison or a monetary penalty in the amount of up to about PLN 40,000,000, depending on the approach of the court.
The later reporting or payment of due tax, social security or health insurance contributions can avoid criminal punishment, as long as the payment is made, all formalities are fulfilled and so-called voluntary disclosure letter is filed.
Prepared by: Accace | Poland
In Portugal, a person is considered as a tax resident upon fulfilling either formal or material requirements, such as:
Upon arrival, the employee must declare their address of stay to the local tax office.
For the purposes of calculation of the days of presence in Portugal within one or more periods, any part of the day of presence is regarded as a whole day (including day of arrival and day of departure).
Split tax residency is acknowledged within one tax period.
The tax period is the same as the calendar year. Based on the local tax system, salaries are paid at the end of the month (not in arrears), therefore salaries paid in January are considered as taxable income of the ongoing calendar year.
Generally, the tax base is calculated from the gross taxable income, including benefit-in-kind.
The annual tax base below EUR 12,180 is not subject to tax. This non-subjection applies to:
. Other non-taxable parts of income are:
The tax base can be further reduced by expenses related to family, health and health insurances, education, house mortgage or rental, among others. Other tax benefits include saving investments for retirement pensions or tax benefit for demanding invoices to suppliers.
The total rate, therefore, is 34.75%.
The employee needs to register in Portugal for social security, while local and foreign employers must also register and then deduct and pay the respective contributions on behalf of the employee and the employer´s part.
The calculation base for social security is calculated monthly from the gross taxable income.
Social security is covered by due tax in Portugal, deducted, reported and paid by both local and foreign employer on a monthly basis.
A1 forms for purposes of the Art. 12 of the EU regulation 883/2004 are generally issued only for the duration of each respective posting.
A1 forms for purposes of the Art. 13 or 16 of the EU regulation 883/2004 may be issued for period of 1 to 2 years or even longer.
Health insurance is covered by the social security contributions, but it is not mandatory. However, insurance for working accidents is mandatory, usually costing between 0.5% and 1% of the calculation base. It is paid by the employer on a monthly, quarterly or yearly basis, calculated from the gross income.
The employee needs to register in Portugal for this insurance, while local and foreign employers must also register and then deduct and pay the respective contributions on behalf of the employee and the employer´s part.
Any employee with income taxable abroad is obliged to file an income tax return, whereas a yearly tax reconciliation by the employer is not allowed.
The due date for filing the tax return falls on June 30, with the possibility to extend the deadline till December 31 for incomes having source abroad in case the tax assessment in the other jurisdiction is not finalised until June 30. If a new fact resurfaces that has an impact on the tax assessment, a 30-day long extension is possible
The filing must be done online. Representation by a tax adviser and power of attorney is not required.
If there is no double tax treaty, the set-off method can be applied, limited to the applicable tax in Portugal. If there is a double tax treaty, the set-off method can be applied limited to the tax paid abroad. The application of the exemption method only applies to non-habitual residents, which is a special tax regime to new residents. To apply the respective method, a certificate on paid tax or similar confirmation is required.
To apply for available tax benefits respective evidence is required. Depending on the respective tax benefit the evidence or documentation may need to be presented to the tax authorities with the tax return.
In Portugal, 0.5% of the paid tax may be donated to a non-profit organisation.
In general, the income is attributable to the country where the work is performed. If the income or its part cannot be attributed to one country as whole, then the ratio based on the respective time worked in Portugal and other countries is applied.
The employer, including foreign employer, is obliged to report and withhold tax on a monthly basis. Withheld tax is due within 20 days after the end of the month in which the salary was paid. The monthly report of the employer is due within 10 days after the end of the month in which the salary was paid. The yearly report is due until February 10 of next year.
The employee is obliged to file an income tax return, whereas there is no system allowing the local or foreign employer to process the calculation and payment of due tax.
The due date for filing the tax return falls on June 30, with the possibility to extend the deadline till December 31 for incomes having source abroad in case the tax assessment in the other jurisdiction is not finalised until June 30. If a new fact resurfaces that has an impact on the tax assessment, a 30-day long extension is possible
The filing can be done online, in written by post or personally. Representation by a tax adviser and power of attorney is not required.
To apply for available tax benefits respective evidence is required. Depending on the respective tax benefit the evidence or documentation may need to be presented to the tax authorities with the tax return.
In Portugal, 0.5% of the paid tax may be donated to a non-profit organisation.
In general, the income is attributable to the country where the work is performed. If the income or its part cannot be attributed to one country as whole, then the ratio based on the respective time worked in Portugal and other countries is applied.
There is no special penalty related to A1 forms in Portugal. However, a missing A1 form may lead to negative implications and penalisations abroad.
Similarly, foreign employee coming to Portugal without an A1 form may lead to the following implications:
If the purpose of incorrect reporting of due tax and social contributions is to avoid or decrease them, it is regarded as a criminal offence. The penalty depends on the value and may be as high as 8 years of prison.
The missing payment of the due tax and social contributions is regarded as a criminal act if the tax due exceeds EUR 7,500. The penalty may be as high as 8 years of prison.
However, their later reporting or payment can avoid criminal punishment.
Prepared by: Collegium | Portugal
A person is a tax resident if:
For the purposes of the calculation of days of presence in Romania within one or more periods, any part of the day of presence is regarded as a whole day (including the day of arrival and the day of departure).
Split tax residency is not acknowledged between more countries within one tax period.
The tax period is the same as the calendar year.
Generally, the tax base is calculated from the gross taxable income (money and in-kind) decreased by social security contributions paid by the employee, further decreased by non-taxable parts of the income, if the case.
The non-taxable values of income, among others, are the following:
There are multiple possibilities for deductions, however, they depend on the income, family situation and tax residency.
In Romania, social security contribution is withheld and paid by the employer from the income of the employee. It is also the obligation of the employer to register the employee.
The monthly basis for calculating the social security contribution in case of individuals who obtain income from wages, represents the gross income received in Romania or abroad. In the case of individual full-time or part-time employment contracts for which the level of social security contributions (CAS and CASS) is below the level of contributions calculated on a basis equal to the basic minimum gross salary in the country, the CAS and CASS obligation is introduced at the level of those due on a basis represented by the minimum gross salary in the country, corresponding to the number of working days in the month in which the individual employment contract was active, the difference being borne by the employer on behalf of the employee.
The social security contribution is calculated and paid by the employer no later than 25th of the month following the payment. Should the employee be part of two or more separate labour contracts, then all employers be obliged to report and pay social security contributions.
The process of issuing the A1 form has switched to an electronic platform of the Pension House and the regular issuance timeframe is around 1 month.
In Romania, health insurance is withheld and paid by the employer from the income of the employee. It is also the obligation of the employer to register the employee.
The monthly basis for calculating the contribution of health insurance in case of individuals who obtain income from wages, represents the gross income received in Romania or abroad. In the case of individual full-time or part-time employment contracts for which the level of social security contributions (CAS and CASS) is below the level of contributions calculated on a basis equal to the basic minimum gross salary in the country, the CAS and CASS obligation is introduced at the level of those due on a basis represented by the minimum gross salary in the country, corresponding to the number of working days in the month in which the individual employment contract was active, the difference being borne by the employer on behalf of the employee.
The contribution of health insurance is calculated and paid by the employer no later than 25th of the month following the payment. Should the employee be part of two or more separate labour contracts, then all employers be obliged to report and pay health insurance.
An individual who works in Romania and receive salaries from employers with no registered office in Romania would have the liability to declare income tax, while the non-resident employer could be subject to social security contributions on behalf of the latter.
The due date for tax return is 25th of the month following the payment.
The submission of the related tax return would be requested by electronic communication.
As per the Romanian legislation, provisions of a double tax treaty may apply provided that a valid tax residency certificate would be available
Non-resident individuals working in Romania for local employers, would be subject to local taxation as per the labour legislation. Thus, they will be subject to monthly income tax, that would be computed, withheld and paid to relevant tax authority by the employer.
The due date for tax return is 25th of the month following the payment
The submission of the related tax return would be requested by electronic means of communication.
Failure to submit the relevant statement in due time may be imposed with a fine ranging RON 50 – 5.000.
Also, late payment charges in total amount of 0,03% may be imposed for each and every day of failure to declare and pay the relevant tax liability.
The incorrect reporting and missing payment of due tax, social security and health insurance contributions can be regarded as a criminal act if it is proven that they were done for the purposes of tax evasion.
Prepared by: Accace | Romania
In Slovakia, tax residency is based on fulfilling either formal or material criteria, such as:
For the purposes of calculation of the days of presence in Slovakia within one or more periods, any part of the day of presence is regarded as a whole day (including day of arrival and day of departure).
In Slovakia, split tax residency between more countries within one tax period is acknowledged.
The tax period is the same as the calendar year. The threshold for the tax rate changes every year in Slovakia.
Based on the local tax system, salaries paid in January for the work performed in December are considered as taxable income of the previous calendar year. Income from employment concerning a previous year but paid after January is regarded as taxable income of the year in which it is paid.
The tax base is calculated from the gross taxable income, including monetary income and benefits in-kind, decreased by the:
To decrease the tax base, other tax benefits may be applicable (subject to different requirements and limitations):
If the employee is subject to the Slovak social security, the employer must register them. Both local and foreign employers must register, deduct and pay the respective contributions on behalf of the employee and the employer.
The social security base is calculated on a monthly basis from the monthly salary, more precisely from the gross taxable income without accord to social and health contributions decreasing the tax base.
There is no minimum base applicable for the calculation, only a maximum base, which depends on the average salary in Slovakia. Currently, in 2025, the maximum base equals to EUR 15,730 per month. The maximum base applies to the whole income of the employee from all employers. On the side of the employer, there are some minor social contributions without maximum limitation, while the maximum base is applicable to each employer separately, not jointly.
The due social security is calculated as:
Social security contributions are not covered by the due tax, and therefore are calculated and paid separately, on a monthly basis.
The employer is obliged to file monthly reports to the social security institution, which automatically exchanges information with the tax authorities.
If the employee is employed by 2 or more employers, all employers are obliged to report and pay the social security contributions, including foreign employers.
A1 forms for purposes of the Art. 12 of the EU regulation 883/2004 are generally issued only for the duration of each respective posting. A1 forms for purposes of the Art. 13 or 16 of the EU regulation 883/2004 may be issued for period of 1 to 2 years or even longer.
Slovak authorities do a thorough check of documents and conditions before issuing A1 form. Therefore, it may be lengthy process.
For health insurance, the employee needs to register as an insured person at the selected health insurance institution. Both local and foreign employers must register, deduct and pay the respective contributions on behalf of the employee.
The health insurance base is calculated from the gross taxable income; including also other types of income (not just income from employment). Contributions are paid on a monthly basis, as advances, whereby a reconciliation of the whole income and health insurance premium is done each year, on the basis of reported taxable incomes. There is no minimum base applicable for the calculation, however, for low-income employees there may be a deductible part decreasing the applicable calculation base. There is no maximum calculation base for the employee nor the employer.
The due health insurance is calculated as: calculation base multiplied by the applicable rate.
Example for an employee: EUR 10,000 * 4% = EUR 400
Health insurance contributions are not covered by the due tax, and therefore are calculated and paid separately on a monthly basis, while they are also subject to a yearly reconciliation. The employer is obliged to file monthly reports to the health insurance institutions. If the employee is employed by 2 or more employers, all employers are obliged to report and pay the health insurance contributions, including foreign employers.
An employee with taxable income abroad is obliged to file an income tax return. A yearly tax reconciliation by the employer is not allowed, in such case.
The tax return deadline falls on March 31, but it may be extended with written notification by up to 3 calendar months or by up to 6 calendar months with income taxable abroad.
The tax return can be filed electronically or in written form by post or personally. However, entrepreneurs are obliged to communicate with the tax authorities only electronically. Representation by tax advisor is voluntary; in such case a signed power of attorney is required.
In case a double tax treaty is not applicable, the income from employment taxed in the other country may be exempted from taxation in Slovakia. In case a double tax treaty is applicable, which allows the application of a set-off method, the employee can apply the exemption method, if the income was taxed abroad and it is more beneficial to them. For the purposes of avoiding double taxation, generally, a certificate on the paid tax or similar confirmation is required. In exceptional cases other evidence may be accepted.
To apply for available tax benefits respective evidence is required. Depending on the respective tax benefit, the evidence or documentation may need to be presented to the tax authorities with the tax return. In Slovakia, 2% of the paid tax may be donated to non-profit organisation; it is 3 % for volunteer workers. In general, the income is attributable to the country where the work is performed. If income or its part cannot be attributed to one country as a whole, then the ratio based on the respective time worked in Slovakia and other countries is applied. Individual parts of income may need individual evaluation and attribution ratio as they may concern different time periods or situations. This may concern, especially, the paid vacation (granted for calendar year), bonuses and benefits.
The local and foreign employers are obliged to report and withhold tax monthly. Withheld tax is due within 5 days after the date on which the salary was paid. The employer´s monthly report is due by the end of the calendar month following the month concerned. The yearly report is due by the end of April.
Employers may handle the yearly tax reconciliation, upon timely request of the employee (filed till February 15), subject to the condition that the employee has no other income taxable from Slovakia. When these conditions are not fulfilled, the employee is obliged to file a tax return in Slovakia. Filing a personal income tax return by a foreign tax resident is highly recommended in cases when the employee needs a confirmation on paid tax issued by the Slovak tax authorities.
The deadline for filing the tax return is March 31, however it may be extended by up to 3 calendar months
The tax return can be filed electronically or in written form by post or personally. Representation by a tax adviser is not mandatory but voluntary; in that case, a signed power of attorney is required. However, tax residents out of EU may obligatorily need representative for deliveries from tax authorities.
Entitlement to tax benefits is subject to condition of having at least 90% of the total income from sources in Slovakia. Depending on the respective tax benefit, the evidence or documentation may need to be presented to the tax authorities with the tax return. In Slovakia, 2% of the paid tax may be donated to non-profit organisation; it is 3 % for volunteer workers. As of January 2025, the taxpayer may allocate 2% of the paid tax to their parent receiving a retirement pension. Every taxpayer has a dedicated tax account number provided by Slovak tax authorities, where the due tax is paid.
In general, the income is attributable to the country where the work is performed. If income or its part cannot be attributed to one country as whole, then the ratio based on the respective time worked in Slovakia and other countries is applied. Individual parts of income may need individual evaluation and attribution ratio as they may concern different time periods or situations. This may concern, especially, the paid vacation (granted for calendar year), bonuses and benefits.
In determining the amount of the penalties, the Slovak tax authority considers the gravity, duration and consequences of the unlawful condition and the tax reliability index. As of January 2024, the tax authority does not impose the penalty which amount may be determined within the prescribed range, for the first infringement.
There is no special penalty related to A1 forms in Slovakia. However, a missing A1 form may lead to negative implications and penalisations abroad.
Similarly, foreign employee coming to Slovakia without an A1 form may lead to the following implications:
The incorrect reporting of due tax or social and health insurance contributions done with the purpose to avoid or decrease them, is regarded as a criminal offence. The penalty depends on the value and may result in maximum 10 years of prison. The missing payment of due tax, social security or health insurance contributions can also be regarded as a criminal act, if the payment is avoided on purpose. The penalty depends on the value and may result also in maximum 10 years of prison.
Criminal penalisation may also concern the employer, as a legal entity. There are different penalties applicable, e.g. money penalty from EUR 1,500 to EUR 4,000,000, ban of activity or cease of assets.
Nevertheless, the later reporting or payment of due tax, social security or health insurance contributions can avoid criminal punishment.
Prepared by: Accace | Slovakia
According to Article 9 of Law 35/2006, the Tax Agency considers a person to be a tax resident if they fulfil any of the following 3 conditions:
For the purposes of calculation of days of presence in Spain within one or more periods, any part of the day of presence is regarded as whole day (including day of arrival and day of departure).
Additionally, sporadic absences are also taken into account unless the individual can prove their tax residency in another country.
In Spain, split tax residency between more countries within one tax period is not acknowledged.
The personal income tax is made up of a state and an autonomous community tax. The state bracket is the amount an individual has to pay for IRPF according to their income levels, specifically 50%. This amount can change every year depending on what is approved in the Law of Accompaniment of the General State Budget.
The tax rates are as follows:
The Autonomous Community bracket takes regulatory power over 50% of the personal income tax base. In reality there are differences, sometimes significant, depending on where you live. Remember that the taxation is made where you are registered.
The above table is for guidance only, as the autonomous communities usually have the power to make changes. In any case, we can say that there are regions with generally low taxation. This is the case of the Community of Madrid, which has the lowest tax rates in Spain. At the other end of the scale are regions such as the Community of Valencia, which exceeds 50% in total, and Catalonia.
It is also important to note that in the Basque Country and Navarre, powers over personal income tax have been transferred. In these territories, the regional tax authorities are responsible for collecting the tax. The Basque Country has a minimum rate of 23% for incomes below EUR 16,030 and 49% for incomes above EUR 184,950 . Navarre applies a minimum rate of 13% for incomes below 4,458 euros and a maximum rate of 52% for incomes above EUR 334,344.00.
The tax period is the same as the calendar year. Salaries paid in January for the work performed in December are considered as taxable income of the previous calendar year.
In general, the taxable base is calculated by adding together the various types of income from work, dividends, interest and capital gains. All persons who have received more than GBP 22,000 from a single payer or GBP 15,876 from several payers are required to file an income tax return. In the case of two payers, the limit is EUR 22,000 per year if the sum of the amounts received from the second and other payers, in order of amount, does not exceed EUR 1,500 per year.
Currently, deductions are allowed for social security and certain expenses related to economic activity, such as insurance. There is also a special regime for foreigners who move to Spain as company executives or for work reasons.
The employee is registered by their local employer who then deducts and pays respective contributions on behalf of the employee and employer’s part. The same applies for foreign employers.
The social security base is generally the sum of several factors: all payroll items that contribute, as well as the proportional share of additional payments, if applicable. The minimum social security calculation base under the general scheme is EUR 1,323 per month, while the maximum is EUR 4,909.50 per month.
The employee’s social security is calculated by applying a discount to the employee’s paycheck. The tax rates depend on whether the contract is temporary or permanent or whether the employee is a trainee. The company’s social security, in addition to the percentages applicable to the employee, also includes other percentages, such as FOGASA. These percentages are applied to the contribution base and it is what the company or the worker must pay, each one in its case.
In case an employee works for several employers, the maximum calculation base applies for each of the employee’s salaries. Similarly, the maximum base is applicable for each employer separately.
If an employee is employed by two or more employers the social security office must be informed in order to calculate proportionally the % of application to each of the contributions according to the days worked by the employee.
The contributions are paid monthly but may have different periods depending on the incidents or variations that are generated throughout the month.
The process of issuing A1 forms is tedious and can take up to 5 days to resolve. The forms are issued for a maximum of 6 months, otherwise they would be considered as “expatriate” employees.
Health insurance is contracted with a private entity if the company voluntarily decides to offer the service to the employee. The calculation varies depending on the fee offered by the private company.
The employee does not need to register into the system as long as the company provides all the necessary data for the correct completion of the payroll.
It should be taken into account that according to Spanish tax law, medical insurance is tax-free for EUR 500 per year per beneficiary.
There is no minimum nor maximum calculation base for health insurance.
In case an employee is employed by two or more employers, the employers are obliged to declare the payment to the social security and inform about the duplicity of contribution in order to adjust the contributions. Medical insurance is separate and depends on whether the employee voluntarily benefits from the service or not.
All contributions are paid on a monthly basis.
In Spain you are taxed on worldwide income, which means that if you are a Spanish tax resident you must declare all income received.
The due date for tax return is June 30 of the following fiscal year, without the possibility to extend the deadline
The tax return can be filed online by telephone, and at certain government offices. Representation by a tax adviser and power of attorney is not required.
If there is no double tax treaty, there is a double taxation deduction. In case there is a double tax treaty, the tax actually paid abroad can be deducted, however a document of effective payment in the foreign administration is required.
To apply for available tax benefits a proof of foreign tax filing is required.
Both local and foreign employers are obliged to pay the monthly taxes of the employee, however it is the employee’s obligation to file their income tax return.
All persons who have received more than €22,000 from a single payer or €15,876 from several payers are required to file an income tax return. In the case of two payers, the limit is €22,000 per year if the sum of the amounts received from the second and other payers, in order of amount, does not exceed €1,500 per year . The income tax return can be filed online without the need for representation by a tax advisor or power of attorney.
To apply for available tax benefits, tax residency and census documents are needed.
Prepared by: Vasalto | Spain
In order to be considered as a tax resident in Turkey, a person must fulfil both material and formal criteria. They are the following:
For the purposes of calculation of the days of presence in Turkey within one or more periods, any part of the day of presence is regarded as a whole day (including day of arrival and departure).
In Turkey, split tax residency between more countries within one tax period is acknowledged.
The tax period is the same as the calendar year. In Turkey, the salary income becomes taxable once the full associated economic and legal rights are entitled. Salaries are not paid in arrears, therefore the salaries for December would be taxable in the twelfth month and included in the payroll in December. However, retrospective payments can be exceptions, such as bonuses.
In general, the tax base is calculated from the gross taxable income (including salary and all benefits) decreased by social security contributions paid by the employee, further decreased by the non-taxable parts of the income, if applicable. The non-taxable part depends on the value of income, family situation and tax residence.
In order to decrease the tax base, the following items can be deducted:
The employee is registered by the local employer on the online social security portal. The employer then deducts and pays the respective contributions on behalf of the employee and the employer´s part. The registration does not apply to foreign employers (applicable for the entities in Turkey).
Basically, the gross income is the calculation base for social security, which is subject to a cap, i.e. maximum amount. It is calculated on the monthly basis, from the monthly salary and multiplied with the rate. The minimum calculation wage equals the minimum wage. In case the employee has multiple employers, the maximum calculation base applies to each salary, separately on every employer.
In Turkey, the social security institution and tax authority are separate systems. However, they automatically exchange information.
Social security is paid both by the employee and the employer, but the reporting and payment are done by the employer on a monthly basis. In case there are multiple employers, all of them are obliged to pay and report.
Instead of A1 forms, the Turkish Social Security authority issue a certificate under the bilateral agreements between the countries. It may be a time-consuming process, as the authorities would check the documents and conditions before issuing the form.
In Turkey, health insurance is included in the social security premiums. Therefore, the same applies to them as to social security contributions.
If the employee receives salary from outside Turkey (without a recharge to Turkish entity), there is an annual income tax return obligation to be submitted by the employee.
The due date for tax return is March 31, without the possibility to extend the deadline.
The filing can be done electronically, in written by post or personally. Representation by a tax adviser is voluntary but requires a signed power of attorney.
If there is no double tax treaty, the local legislation is applicable. In case the income from employment was taxed in the other country, the tax-credit method can be applied. The employee can use only the method that is available based on the double tax treaty. In order to do so, a certificate on paid tax or similar confirmation is required. The documents should be apostilled and translated into Turkish.
To apply for available tax benefits respective evidence is required. Depending on the respective tax benefit the evidence or documentation may need to be presented to the tax authorities with the tax return.
In general, the income is attributable to the country where the work is performed. If the income or its part cannot be attributed to one country as whole, then a ratio based on the respective time worked in Turkey and other countries is applied. Calendar details and physical presence is important to determine the related days in a country. Upon clarification of the days, a prorate calculation is done.
As of Jan 2022, income tax and stamp tax exemptions have become applicable for wage income. The exemption amounts are equal to the income tax amount and stamp tax amount calculated over the applicable minimum wage on the related calendar year.
The employer, including foreign employer, is obliged to report and withhold tax on a monthly basis. If the employee generates income subject to the annual income tax return, that should be done by the employee, whereas the submission of tax return is due by the end of the March of the following year.
The due date for tax return is March 31, without the possibility to extend the deadline.
The filing can be done electronically, in written by post or personally. Representation by a tax adviser is voluntary but requires a signed power of attorney.
To apply for available tax benefits respective evidence is required. Depending on the respective tax benefit the evidence or documentation may need to be presented to the tax authorities with the tax return.
In general, the income is attributable to the country where the work is performed. If the income or its part cannot be attributed to one country as whole, then a ratio based on the respective time worked in Turkey and other countries is applied. Calendar details and physical presence is important to determine the related days in a country. Upon clarification of the days, a prorate calculation is done.
In Turkey, criminal penalisation is applicable for tax frauds. The penalty depends on the scope of case and may be as high as 5 years of prison.
The later reporting or payment of due tax and social security contributions can avoid criminal punishment.
Prepared by: CottGroup| Turkey
A person is considered a UK tax resident based on the Statutory Residence Test (SRT). This test evaluates residency status using three key tests:
The tax period runs from 6th April to 5th April each tax year.
The United Kingdom’s tax base is calculated by determining the income, profits, or capita of individuals or companies on which taxes are assessed. This includes wages, investments, and business profits, and other sources of income. The government make use of deductions, exemptions, and credits to modify the tax base and establish the final amount of taxes that must be paid. In the UK, taxes are levied in a progressive manner, implying that higher-income individuals pay a higher percentage of taxes.
In the UK, certain types of income are not subject to tax, such as:
These deductions reduce taxable income or provide tax relief:
| Deduction/allowance | When it applies |
|---|---|
| Personal allowance (£12,570) | First £12,570 of income is tax-free (reduces if income exceeds £100k). |
| Marriage allowance (£1,260 transfer) | If one spouse earns below £12,570, they can transfer £1,260 to the other. |
| Blind person’s allowance (£3,070) | Additional tax-free allowance for eligible blind individuals. |
| Pension contributions | Contributions to registered pension schemes qualify for tax relief. |
| Gift aid (charitable donations) | Higher-rate taxpayers can claim extra relief on donations to UK charities. |
| Employment expenses | Deductible if costs are wholly, exclusively, and necessarily for work. |
| Rent-a-Room relief (£7,500) | Tax-free if renting a furnished room in your main home. |
| Dividend allowance (£1,000 – 2024/25) | The first £1,000 of dividends is tax-free. |
| Savings allowance (£1,000/£500/£0) | Basic-rate taxpayers: £1,000 tax-free interest; Higher-rate: £500; Additional-rate: £0. |
| Capital gains tax exemption (£6,000 – 2024/25) | Gains below this threshold are tax-free. |
| Private residence relief (CGT Exemption) | If selling your main home, no Capital Gains Tax applies. |
Certain non-cash benefits provided by employers, such as workplace parking, a company mobile phone, or a company car are not subject to tax.
It’s essential to note that this list is not exhaustive and the regulations concerning taxable and non-taxable income can change from year to year.
The rate of social security contributions paid by the employer in the United Kingdom is:
| Category | Earnings/profit threshold | Rate |
|---|---|---|
| Employee NICs (Class 1) | Up to £12,570 | 0% (No NICs due) |
| £12,571 – £50,270 | 8% | |
| Above £50,270 | 2% | |
| Self-Employed NICs (Class 2) | Profits above £6,725 | £3.55 per week |
| Self-Employed NICs (Class 4) | £12,571 – £50,270 | 6% |
| Above £50,270 | 2% | |
| Voluntary Contributions (Class 3) | No earnings limit (voluntary) | £17.75 per week |
In the United Kingdom, employers have the choice to provide health insurance to their employees. If an employer provides health insurance, the employee will be taxed on the benefit, either through the payroll or via the submission of a P11D at the end of the tax year.
If a UK tax resident works in one or more other countries, their tax obligations depend on several factors, including double taxation agreements (DTAs), residency rules, and tax relief options. Here’s a breakdown of key considerations:
1. UK taxation on foreign income
2. Key scenarios and tax treatment
| Scenario | Tax treatment in the UK | Possible tax relief |
|---|---|---|
| Working remotely for a foreign employer | Taxable in the UK as worldwide income | Claim Foreign Tax Credit if taxed abroad |
| Short-term work abroad (under 183 days in a tax year) | Usually remains UK taxable | Some DTAs may exempt short-term work if no local employer |
| Employed abroad for more than a year | Still UK taxable if UK resident | May become tax resident in the foreign country |
| Split-year treatment (Moving abroad mid-tax year) | Income earned after leaving may not be taxed in the UK | Depends on residency rules |
| Non-domiciled status (Remittance Basis) | Foreign earnings only taxed if brought to the UK | Only available to non-domiciled individuals |
3. National Insurance (social security) contributions
4. How to report foreign earnings to HMRC
To determine if a United Kingdom citizen is obligated to submit a tax return for the applicable tax year will need to be undertaken, utilising the UK residency tests. If it’s deemed that the UK citizen is required to file a tax return, the deadline for submission of the tax return will be on the 31st of January.
If you are required to submit a tax return and fail to meet the deadline for submitting it or paying your bill, you be a subject to a penalty. A late filing penalty of GBP 100 will be charged if your tax return is up to 3 months late and additional charges will apply if it’s later, or if you pay your tax bill late. Additionally, interest is also charged on late payments.
If you fail to make payments of social security contributions in time, interest charges will be applied as a result of the delay.
Prepared by: Accace Adept | United Kingdom
*The applicable rate for income acquired in a seafarer capacity is 1%; **Depends on the tax base; ***There is an increased tax rate on higher incomes; ****Additional bracket tax is paid based on the income; *****Above the threshold of PLN 120,000 the rate is 32%; ****** Additional surtax rate of 3% applies to the portion of annual taxable income exceeding EUR 200,000; ******Above the threshold of EUR 47,537.98 the rate is 25%.
Morocco has a different system for social security and health insurance rates
*Based on the rate of Occupational Accident and Disease fund; **Pension funds; ***Plus a variable rate for occupational accidents.
included in social security rate
included in social security rate
included in social security rate
included in social security rate
Morocco has a different system for social security and health insurance rates
Employers can choose to provide health insurance to their employees
included in social security rate
employers can choose to provide health insurance to their employees
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