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Discussion Starter · #1 ·
Hi Everyone! This may not be the right forum to post in, so please point me in the right direction if there's a better place to direct my question.

Here in the US, I work for a US corporation, exclusively from home. I am planning a long trip to Europe and the UK--probably 10 months. I would continue to work while on this trip, being paid by my US company by direct deposit. The theory is I can travel without a Visa by following this timeline: 6 months in Europe split by 4 months in the UK and Ireland. My question is this: Are there any Visa or tax issues that I haven't considered?

Thanks in advance!!
 

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There's the little matter that you can't "visit" most EU countries for more than 90 days at a time without a long-stay visa. The UK is the exception, given that a US citizen can visit for up to 6 months. But the 90 day limit on EU countries is firm - and cumulative. You can't reset the counter by going to the UK - you have to go back "home" to where you are resident.

And "working" is determined by where you are physically located while doing the work. Not by where your employer is domiciled.

I think you're back to square one for planning purposes.
Cheers,
Bev
 

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Discussion Starter · #3 ·
Thanks Bev, for your response. I understood the Schengen rule to be this: With just a passport, I may stay within the Schengen borders for 90 days per each 180 day period (so 90 in, plus 90 out). After this 180 day period, I thought I would be able to return to the Schengen area for an additional 90 days. I haven't seen any policy that states I must return to my home country between visits to Europe-can you please recommend a resource for further information?

Regardless, assuming that I make a trip of any length, and work for my current employer for some part of my time there, would there be tax considerations even though I would not establish any sort of residency?
 

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I disagree with Bev about whether there's a "back to home country" requirement for Schengen Area stays. I'm not aware of any such requirement. A 90 day Schengen/4 month Common Travel Area/90 day Schengen plan such as the one you describe would meet all visa waiver requirements.

Before you get to the tax consequences you have to determine whether you can legally work remotely for your U.S. employer while in Europe. I think the answer depends on the nature of the work. Will the nature of the telecommuting work change in any way, or is the fact you'll be in Europe entirely incidental?

Then taxes. That depends on each particular country and what they consider tax residency. Most of them are going to have 6 month stay requirements in order to trigger tax residency, but there are some possible exceptions.
 

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Discussion Starter · #5 ·
Thanks for that additional information. My work would not change-I would be doing the same job, only telecommuting from a different location. I will try to find more info on the legality of this, and also on the tax residency timeframes. I don't expect to be in any single country for longer than 2 months at a time.
 

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My work would not change-I would be doing the same job, only telecommuting from a different location.
Probably OK, but do check into that. Oddly enough if you're doing something involving economic activity that affects Europe -- for example, providing customer support to European customers -- then doing that work from within Europe without employment authorization might be illegal even though doing that same work from the U.S. is legal.

In practice people telecommute while on "vacation" frequently.

I don't expect to be in any single country for longer than 2 months at a time.
That's very unlikely to trigger tax residency. To be more precise, I was mainly thinking of whether your telecommuting work would be considered European-sourced income. It very well might be.

As an example, I live in Singapore, but last year (2012) I attended a business meeting in New York State. The nice folks who help me with my taxes figured out that New York State considers those few days New York source income. I was in New York State for a business purpose, and that particular tax jurisdiction has no minimum time requirement. So I filed a nonresident tax return in New York State, and I had a small tax liability there for state income tax. Although I'm a U.S. citizen, the same tax liability apparently would have applied to anybody, including foreigners. For example, a citizen of the U.K. attending the same meeting with ESTA/visa waiver would be in full compliance with U.S. immigration requirements (since the activity and duration are within bounds), would have no U.S. federal income tax liability (assuming no other time in the U.S. or income from the U.S.), but would have a New York State income tax liability. At least, that's how my accountant sees it.

Granted, I'm sure many people don't even know how New York State's income tax code works, but there you go. I think Japan takes a similar stance, to pick another example. Maybe there's a country or three in Europe that works that way too.
 

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Sorry 'bout that - was tired when I posted and mis-expressed myself. No, there is no requirement to return back to your country of residence to reset the Schengen visa "clock." I may have misread your statement about spending 6 months in Europe and thought you were confusing it with the 6 month visa-less UK visitation rights for Americans.

The question remains, however, whether or not it is sufficient to pop over to the UK (for a full 90 days or more) to reset the Schengen visa. Chances are it should work, but it may depend on your precise circumstances in the Schengen area countries. Net-net it comes down to whether or not you find yourself in a situation where you have to demonstrate your "legality" in a given country. (This said as someone who lived as a "*******" in France for some 20 months before getting the situation resolved.)

The tax aspect of your plans could be open to discussion however again, I think you'll be able to get away with it. The various countries define "tax residency" in different ways (I'm thinking of France here) and some don't have any reference to the 183 days of residency that is often cited as an international rule of thumb. But the chances of any of the countries you visit pressing the point are pretty slim as long as you aren't flaunting your situation somehow. Added to that is the fact that you won't be outside the country long enough to qualify for the FEIE anyhow, so you're probably pretty safe (or could claim double taxation in a pinch). If your stay winds up lasting a bit longer or you appear to have surrendered your US residence in some manner, that could become a problem.
Cheers,
Bev
 

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On the residency front, there various ways to get around the Schengen 90-day rule by going to the UK (or elsewhere) for 90+ days. Look online. The key point seems to be that you document your absence, ideally with passport stamps but otherwise by keeping tickets etc. if it were ever to come up.

Note that if you are living somewhere for up to 90 days it might be advantageous to register your address with the local authorities (not the same thing as getting a residence permit, and much simpler) so that you can open a local bank account. But that's a minor detail.

As for working remotely for a US employer, I'm sure there are varying opinions on this, and it's probably technically true in some sense that you might be thought to owe tax to the country in which you're living. But as a practical matter, you can ignore this. Working remotely as a "tourist" on a long "vacation" in several different countries is basically undetectable. Lots of people do it. From a financial and tax perspective, act like you're still living in the US.

Things only get complicated when you want to stay more than three months and need a residence permit.
 
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