Hi I am currently working in Germany on a one year contract.How to I go about attaing tax free status on my earnings as a sole trader.Thanks
Hello, In order to qualify for the exclusion you must meet certain requirements. here are the basic requirements http://www.irs.gov/businesses/small/international/article/0,,id=96950,00.html . In order to get the credit you woul file a form 2555, here is the form http://www.irs.gov/pub/irs-pdf/f2555.pdf. Thanks Tom
This information is of no use to me as it refers to the taxation system in the USA and I am British.
I think your site should state the fact that the information it supplies refers to American citizens.
This will be recategorized to go to the UK queue. Thanks!
H,i do you know when I will receive an answer.
Thanks for your question and apologies for the delay - you question has just been transferred to UK tax.
Can you advise when your contract began and when it will cases, as you need to have a contract that lasts at least a full tax year, during which time your visits back to the UK do not exceed more than 90 days.(and these for family visits or incidental work duties, such as meetings)
If you achieve the full tax year, and visits less than 90 days, then HMRC will treat you as not resident and this will mean no UK tax liability.
If you do not achieve the full tax year, then you will be treated as resident in the UK and liable to UK tax on this income.
You should arrange to complete form P85 for HMRC when you take this work up, link here for this form http://www.hmrc.gov.uk/cnr/p85.pdf
I started the contract on 01/04/12 and will complete it in late march next year.
Is it too late to apply for form P85.
Thanks for your response
Can you clarify that you left on 01/04/2012 (just 2 weeks ago) and will return before 05/04/2013
If this is the case then you will not complete a full tax year out of the UK, as having left on 01/04/2012 you need to remain out of the UK with a contract beyond 05/04/2013.
Is there any change the contract can be extended to past 05/04/2013?
No its not too late to complete the P85
Hi again Sam, I left the UK almost 7 weeks ago on the 01/04/12 not on the 01/05/12.
My contract is due to end towards the end of March 2013, I can stay out of the UK until
the end of the tax year on the 05/04/12, would this meet the requirements for non residency for tax purposes.
Thanks for your response
Then you have to remain out of the UK on this contract beyond 05/04/2013 ( the actual contract under which you work needs to last a full tax year)
If you achieve this then you will be treated as not resident and not liable to UK tax.
However, if the contract will end in March 2012, then ensure you do not visit the UK between its end date and 05/04/2012, so that you remain out of the UK for that full tax year to be awarded non residency status.
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