# Tax treaties/tax laws.



## bigpearl (Jan 24, 2016)

Hi all, I posted this in the introductions but a kind member suggested to put it on the main board.

Hi to fellow members of Expat Forum. I'm an Aussie Expat living in the Philippines and hang out on that platform mostly.
I have a question for the brains trust if any one can offer up some advice I'd appreciate it.

My niece moved to Sicily 4 months ago, she spent 3 years with her Sicilian boyfriend while he was living and working in Australia, they decided to move, all good, he is working for his families business and she is working online for an Australian company full time, wages, super, tax etc. She is now looking at dual citizenship (seems too quick for me but).
Their migration lawyer/consultant has advised my niece that she needs to pay tax on her earnings from Australia, invoice the company for her work from Italy and pay taxes there,,,,,,,, go figure, while I'm not up on the tax treaty laws and where you can derive income from I think something is wrong with the advice she has received. 
Hope someone can offer up some help.

BTW from all my worldly travels over the last 40 years Italy is my favourite (3 visits so far) but love took me to the Philippines,,,,,,,, vastly different but enjoying it to date.

Cheers, Steve.


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## NickZ (Jun 26, 2009)

The general rule is employment is taxed in the location of the work. 

If that's what you're asking.


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## GeordieBorn (Jul 15, 2016)

Just so the *l**ink here to the DTA* does not get missed ....


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## bigpearl (Jan 24, 2016)

NickZ said:


> The general rule is employment is taxed in the location of the work.
> 
> If that's what you're asking.


Thanks Nick. I am only going on my experience working for international companies (Australia, US, UK and German) in the film and TV industry, contracted and paid in Australia as an Aussie citizen but working in Malaysia, Philippines, Fiji, Samoa, Panama and many others for up to 6 months at a time and never paid taxes in any country aside from my own.
The US have never taxed me and pay in US dollars but I declare that income and pay appropriate tax in Australia.
I live now in the Philippines retired,,,,,,, well almost and have both passive income from investments as well as my family trust generating income controlled from the Philippines but reconciled and taxed in Australia.

My niece has worked for this company for 4 years online in Australia and now does the same job in Sicily. Perhaps she should simple say nothing? Her income is derived from Australia, she pays her taxes and spends the money living there, from the sounds of what the Italian tax system is wanting she may well lose her job and become a burden on the system there?
I don't know the tax laws there only my enjoyable holidays to a beautiful country. I simply don't want to see my niece given incorrect advice or get ripped off that's why I ask those that may have a similar problem and appreciate any and all input. Thanks to all.

Cheers, Steve.


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## NickZ (Jun 26, 2009)

From memory most countries have special rules for film workers. Most of them aimed at "talent". The idea being if a film production comes into the country all the work around it generates a positive for the country.

You don't mention how she is living in Italy. Did she get a visa? Does she have residence?


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## bigpearl (Jan 24, 2016)

NickZ said:


> From memory most countries have special rules for film workers. Most of them aimed at "talent". The idea being if a film production comes into the country all the work around it generates a positive for the country.
> 
> You don't mention how she is living in Italy. Did she get a visa? Does she have residence?


Again thanks for your reply Nick,,,,,,,, yes you are right, film and TV companies do deals in high government and many things are overlooked or over ridden for the benefit of all concerned. Dollars talk.
I will talk to her mother today (my sister) and find out her visa status but can only assume she is a tourist and looking now at dual citizenship. My niece has worked in Italy many times over the last 10 years as an english tutor to bankers etc for 6 month stints and was probably paid locally, contract what ever, not sure.
I think my real question comes back to: She is legally employed in Australia and pays her dues, I know if she did the same thing in the Philippines there would be no problems, they, the Philippines government are happy to see foreign dollars spent here to help a third world economy.
From my last conversation with my sister she is looking at getting dual citizenship and perhaps that's the problem.

I will update once I chat with my sis.

Cheers, Steve.


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## Bevdeforges (Nov 16, 2007)

The general rule in these international situations is that you are considered to be working in whatever country you are physically located in while doing the work. Income from investments (so-called "passive income") is considered to be sourced in the country where the investment is located - but the taxation on passive investments is often determined based on treaties between the two countries involved.

For employment based income there are also considerations of "tax residence" (different countries may determine this based on different criteria) and the need to be registered with and paying into the social insurance plans in the country where you are living.


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## bigpearl (Jan 24, 2016)

Bevdeforges said:


> The general rule in these international situations is that you are considered to be working in whatever country you are physically located in while doing the work. Income from investments (so-called "passive income") is considered to be sourced in the country where the investment is located - but the taxation on passive investments is often determined based on treaties between the two countries involved.
> 
> For employment based income there are also considerations of "tax residence" (different countries may determine this based on different criteria) and the need to be registered with and paying into the social insurance plans in the country where you are living.


Sorry for the delay replying.
Niece in Sicily started a business, invoices her company in Australia and will pay Italian tax annually I presume when she sees her accountant. Thanks to all for the input.

Cheers, Steve.


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