# In Luxembourg remotely work for US company



## hansen79 (May 25, 2017)

My wife will be transferred to Luxembourg office in next several month for a two year assignment. The company will sponsor EU blue card. I believe I get the work permit as well. 
I want to continue my current work relationship with my US company. I am working remotely in US as well. So work remotely should not be a problem. 
Which of the following maybe a better option for me? 
1. Ask whether my US company can keep my payroll in US. And I will file Luxembourg tax my self. Do they have to declare the working relationship to Luxembourg government?
2. My US company have an office in Belgium. I can ask whether my payroll can be transferred to the Belgium office and still work for the US office. Can they deduct those Luxembourg tax for me if they have a Belgium office?
3. I can turn into a contractor. And setup an freelancer entity in Luxembourg(not sure how difficult it is). 

Thanks
Hansen


----------



## Bevdeforges (Nov 16, 2007)

Working on the US payroll sets up quite a few problems for you, in that you should normally be able to exclude all your foreign "earned" income (i.e. salary) on your US taxes, thanks to the Foreign Earned Income Exclusion (form 2555). Your US employer can't really not withhold US taxes, even though you would be claiming them all back, because there are rules related to "justifying" any employee with 0 withholding. Another issue could be that of state taxes - which may or may not be refundable while you are working overseas.

A further problem is that of US social security. As a Luxembourg resident, you would normally be subject to Luxembourg's social insurances system rather than the US's - unless you are a "transferee" of your company and on their Luxembourg payroll. (I don't think they can handle the Luxembourg taxes and withholding from their Belgian office, but hey, you can always ask.) A big problem is that US social security is very nearly impossible to get back if it is withheld "in error."

The way this sort of thing is "supposed" to work is that you would set up a business entity (which involves registering with the various tax and social insurance agencies) and then bill your company for your services. You'll have to check the rules on this, but it could potentially involve charging your "employer" VAT on top of whatever "salary" you receive, and don't forget that you would need to bill back your employer for expenses, too.

Working remotely like this can be a real mine field, since you are working in whatever country you are physically located in while you are doing the work. And that means you're subject to that country's labor laws, including social insurances and taxes. 
Cheers,
Bev


----------



## hansen79 (May 25, 2017)

Thank you so much Bevdeforges for the information. I want to make sure what I do is legal and compliant. I don't mind pay a little more on the social security tax. And my state doesn't have a state tax.

I think the ultimate solution is setup a business in Luxembourg which should compliant with all legal/tax requirement in my scenario.

I also saw some staffing company like Manpower exist in Luxembourg. Maybe I can check with my company whether they can hire me with the middleman. Then I don't need to handle those invoice/tax/legal thing my self.


----------



## chiaracokieng (Jan 10, 2019)

Hello Hansen, I am trying to do the same right now. What did you end up doing?


----------



## andrew8 (Oct 5, 2018)

chiaracokieng said:


> Hello Hansen, I am trying to do the same right now. What did you end up doing?


I think you will find the best option is to start your own company and create a contract between yours and your "employing company".

It seems convoluted but it probably keeps things much simpler in the long run. This way, if you end up working for another employer too - you can invoice them directly as well from your local company.


----------



## baldilocks (Mar 7, 2010)

Always be careful and legal otherwise you might fall foul of the tax authorities who may think you are trying to avoid tax.


----------

