Working Remotely in Italy for American Company

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Working Remotely in Italy for American Company


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Old 16th December 2014, 11:26 PM
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Default Working Remotely in Italy for American Company

Hi,

I have tried to search the forum for an answer but haven't quite found what I'm looking for. My husband just received an assignment to work in Italy for 6 months and I am going to move with him. The company I currently work for in the U.S. is letting me continue to work as a "contractor". I will have a permit to live in Italy, but no permit to work. I am in online marketing so I am able to do my work from anywhere, but I am trying to figure out what is legal. From what I've read, I can work for up to 3 months with no problem, but don't know past that. Does anyone have any experience with working remotely from another country and what I would need to do to be able to do this legally?

Thanks!

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Old 17th December 2014, 07:24 AM
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From an Italian tax point of view the fact your work is "remote" is completely immaterial. You will be physically located in Italy, and it's highly likely (in the scenario you describe) Italy will deem you a tax resident. Consequently, I predict, you'll at least be subject to the Italian tax system and its associated financial reporting, including (quite possibly) Italian social insurance contributions since "contractor" status doesn't typically keep you within the bounds of the U.S.-Italy Social Security treaty on the U.S. side.

From an immigration point of view I'd recommend checking with the agency your husband's employer has (I assume) engaged to get his work permission sorted. That agency should be able to advise you on whether what you propose is legal in Italy. It might be, provided you're tax compliant. I'm assuming your husband is not an EU/EEA citizen as you've framed the question because, if he were, you would have the right to work in Italy (even for an Italian employer) as his legal (opposite sex) spouse.

Note that violating two sets of laws is far worse than violating one set. It's of course best to violate no laws.

An alternative approach here is that you remain on your employer's U.S. payroll and "bookend" your husband's assignment in Italy. For example, let's suppose your husband's assignment will run from April 1, 2015, through October 31, 2015. You could accompany your husband and stay in the Schengen Area (which includes Italy) from April 1 for 45 days, working (or at least "working") remotely. Then leave the Schengen Area for 46+ days (to reset your "Schengen clock"), then finally visit again for 45 days. That pattern would work on all fronts.


Last edited by BBCWatcher; 17th December 2014 at 07:32 AM.
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Old 17th December 2014, 11:18 AM
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Technically speaking, if you are physically located in Italy while doing the work (no matter where in the world your employer, customers or other contacts are located) you're generally considered to be working in Italy.

You should check with your husband's employer about the type of visa you'll have - probably a "dependent" visa based on your husband's visa status - and ask them if you'll have any working privileges. (I'm guessing the answer is going to be "no" but at least you asked.) Probably worthwhile at least to find out what your husband's tax status will be while he's there - it could make a difference.

For short-term assignments like this, where you won't spend the majority of any tax year in Italy, you may actually not incur an Italian tax obligation. (But I will fully admit that I don't know what Italy's rules/laws are on when and how you are considered "tax resident.")

What many people do in such circumstances is to just go ahead and telecommute on their own without reporting the income to the country they are "visiting." You apparently won't be outside the US long enough to qualify for the FEIE or other "expat" breaks, so ultimately, you pay all the usual taxes to the US. In fact, it may not even be necessary for your employer to try to make you a "consultant" (which can cause various problems on their end) but just keep you as a regular "employee" with perhaps an adjustment in your salary (say, if you'll only be working part time while away). Strictly speaking, it's not quite kosher, but in some countries in Europe, this has actually been the recommendation of the local tax authority to someone in similar circumstances.
Cheers,
Bev

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Old 17th December 2014, 11:57 AM
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I'm fairly familiar with Italy's tax laws, and the way the scenario was described would "likely" result in tax residence. But, as I implied (and as I agree with you Bev), it should be quite easy here to step back from that outcome, if desired.

If the original poster had written something like "less than 6 months," the whole situation "likely" changes.

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Old 17th December 2014, 04:59 PM
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Without a work visa, you would be in technical violation and at risk if you were caught - as unlikely as that may be.

I presume your "remote work" will involve an internet connection? If so, keep in mind that "high speed internet" for most of Italy means DSL speeds, at best. Depending upon the exact nature of your work, this may be a minor inconvenience or a major impediment.

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Old 18th December 2014, 01:00 AM
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Yes, but let's make sure we all understand that these are separate issues: work permission/immigration, and tax residence/financial reporting. It's possible to violate one set of laws, the other set of laws, both sets of laws, or neither set of laws.

I outlined one approach (the "bookend" approach) that should be compatible with both sets of laws, though check with an expert or at least get additional informed opinions to make sure. There may be other possible approaches.

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Old 18th December 2014, 11:28 AM
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Thanks so much for all of your input. It's been helpful!

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Old 27th February 2019, 12:52 PM
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Question Please share your findings

Quote:
Originally Posted by MagC View Post
Thanks so much for all of your input. It's been helpful!
Hi there,

Were you able to figure out the facts and what's legal? Please share.

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Old 27th February 2019, 02:36 PM
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The post you're replying to is from 2014, and the poster hasn't been back to the forum in a good 4 years or more. It might be better to post a new question. The laws may have changed in all that time.

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