# Working remotely for a Canadian company from Austria - tax implications



## jameshicklin

Hi everyone,

My wife (a Polish citizen) and I are planning to move to Graz, Austria next year. She will be completing her PHd there, and I plan to move with her (I am a Canadian citizen). I currently work as a software engineer here in Vancouver, Canada, but my employer has expressed an interest in keeping me employed and continuing to pay me into my Canadian bank account to work remotely.

Now, I know that the first step is getting the Austrian work visa, which shouldn't be problematic as my wife is an EU citizen and will be studying there full time, along with getting paid an average salary.

After that, things seem to get a bit murky. I have the option of staying on my current employer's payroll and using a Canadian bank account. I plan to keep these accounts open anyways. The issue here is that my income tax is deducted at source. From what I have gathered, I will owe Austrian tax first, and then file Canadian tax afterwards. I suppose it is possible to stop getting taxed at source, and set aside the necessary income to paxes at the end of each tax year in Austria, but I am not sure how complex this might be.

The other option is to set myself up as a contractor in Austria, and invoice my employer remotely. This is the easier option for me, but more complex from the viewpoint of my employer.

I don't think this is that uncommon of a scenario given the number of remote software developers these days, but I am finding concrete information difficult to come by. Does anyone have any experience in this regard?

Best,
James


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## Bevdeforges

This is a fairly common issue and comes up all the time here on the forum.

There are a couple of issues in your case. First of all, I'm not sure, but I think for Canada it is necessary to declare yourself a non-resident before you can stop paying Canadian income taxes. (There's also the matter of whatever taxes are taken from your pay there for social insurances, as those won't really benefit you if you're not resident there.) 

Then, you have the issue of the Austrian notion of "tax resident" - usually it includes your having your primary residence there, so you can pretty well assume you will be tax resident there AND liable for whatever social insurance charges there are in Austria. It's pretty likely that Austria splits the social charges with your employer - and this is the "usual" reason why employers don't want to take you off their local payroll. Social charges in Europe are normally significantly higher for the employer than in Canada.

Making you a contractor has other "risks" for your employer, in that many government scrutinize these "contractor" arrangements pretty closely, given the tendency for employers to abuse them in order to avoid various payroll costs. It would/might also involve your having to register a "small business" in Austria so that you would be responsible for paying your own social charges and taxes. If you go that route, you'll want to be careful to negotiate your pay so that you are covered for the various charges that your employer traditionally pays for you. 

Your employer might be able to register somehow with the Austrian officials as a foreign employer having a single employee - so that they can pay the appropriate social charges and payroll taxes directly to Austria. (Would involve taking you off the Canadian payroll and paying Austrian payroll rates.) I know this is possible in France for employers with only one or two employees in the country.

One other possibility might be to see what arrangements there are in Austria for a "temporary employee" - usually limited to someone who will be returning back home in three to five years. It's sometimes possible for you to pay local (i.e. Austrian) income tax, but to remain in your home country social insurance scheme (for health care, retirement and other benefits). But that's something your employer would have to arrange - and generally you find that this kind of plan works only for upper executives.

There are also some options for going through an intermediate company (and yes, they take a "commission") which would handle your taxes on the Austrian side and your employer could pay them like they would any other supplier. That might be your best option in the short term.
Cheers,
Bev


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## jameshicklin

Hi Bev,

Thanks for the extremely detailed reply! It really helps put the potential options into perspective. I spent a few hours doing some research this morning, and it definitely looks like the "intermediate" company option seems to be the most straightforward. Do you happen to have any recommendations? My googling this morning turned up "ShieldGEO" and "Mauve" as two potential options. Do you have any idea what kind of cut these types of companies might take? 

Thanks again!

Best,
James


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## EuroTrash

Umbrella companies or portage salarial are relatively mainstream in France. Generally their management fee is on a sliding scale that gets less as your salary increases, it usually starts at around 10% and reduces from there to maybe 6 or 8%. Payroll taxes are high in France and using portage salarial you would expect to end up with slightly under or slightly over 50% of your gross salary paid net into your bank, that's without income tax deducted.

I would suggest your next step is to approach a couple of them for a chat. I did this in France and the company I contacted was very helpful indeed and actually advised me that setting up freelance would probably work best for me! I guess the reason so many people (relatively speaking) use portage salarial in spite of the high deductions and there are so many ps companies in France is that France is very alert to the problem of 'concealed employment', ie employees posing as self employed to avoid payroll taxes. I don't know how restrictive Austria is.


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## Bevdeforges

Thank you EuroTrash - I absolutely blanked on what the "portage salarial" companies are called. And while I have heard you (and others) refer to them fairly often, I have no personal experience with them.
Cheers,
Bev


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## EuroTrash

Bevdeforges said:


> Thank you EuroTrash - I absolutely blanked on what the "portage salarial" companies are called. And while I have heard you (and others) refer to them fairly often, I have no personal experience with them.
> Cheers,
> Bev


In France the big advantage of portage salarial is that French workers are well looked after by the lois de travail and if you work via ps you're entitled to the full social rights package - holiday pay, employer pension contributions, chômage if necessary, etc and I suppose under the recent laws a mutuelle as well? not sure on that. Plus of course peace of mind because you're not in danger of being requalified by URSSAF if you don't genuinely meet the s/e criteria. But Macron has recently raised the possibility of extending chômage cover to the self-employed (personally I hope this doesn't become obligatory) and that might change the equation slightly. 
Also I'm not entirely sure whether a portage salarial company in France would take on a full time permanent employee or whether by definition they only deal with fixed term contracts.
But it's all dependent on national policy so could be significantly different in Austria.


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## Bevdeforges

Yeah, I did a quick check around to see if I could find out the German equivalent of "portage salarial" and didn't find anything that seems to fit. But it might pay to consult an "interim" company (one that manages short-term or temporary employment) in Austria. In essence, it would be a limited term "job" - though what the regulations are for that sort of thing (i.e. duration is the biggie) I don't know. However an "Interim-management" company could probably point you to the right sort of company if they don't/can't handle the situation themselves.

Obviously, it would cost the employer something in fees over and above the base salary and (most likely) increased social charges.
Cheers,
Bev


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## Reinier

Hi James,
Great post. Thanks! What did you end up doing?
My wife and I are in the exact same boat. Also from Vancouver and moving to Europe (Holland). Me being Dutch and my wife's employer has shown interest in keeping her on the payroll.
Thanks,
Reinier


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## junglejen

Hi guys, 
wondering what you ended up doing? I am bothh a canadian and french citizen, currently living in Europe. My former employer would like me to work for them remotely and I am trying to figure out how to best make it work in regards to taxes ... with no clear answer. Which path did you end up following?
Thank you!
J


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## arose

Any updates here? Is there any way to work remotely in Austria without using agencies? I'm just thinking that this might be off-putting for employers to have to foot these extra costs. It otherwise is truly hard to find information about how to proceed with things in Austria, especially where this is expectedly a long-term contract as opposed to a short-term project. Hope someone responds with more info. Any feedback from those who're actually doing this is especially welcome.

Thanks!


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## Bevdeforges

arose said:


> Any updates here? Is there any way to work remotely in Austria without using agencies? I'm just thinking that this might be off-putting for employers to have to foot these extra costs. It otherwise is truly hard to find information about how to proceed with things in Austria, especially where this is expectedly a long-term contract as opposed to a short-term project. Hope someone responds with more info. Any feedback from those who're actually doing this is especially welcome.
> 
> Thanks!


It is certainly possible to work in Austria without using an agency - but, that option involves establishing the Austrian version of a small business, complete with registration for taxes and social insurances, for which you will be solely responsible. As far as your "employer" is concerned, you would be a vendor, not an employee.

But for the information about working in Austria as a foreigner, start here: https://www.migration.gv.at/de/leben-und-arbeiten-in-oesterreich/arbeiten/beschaeftigungsformen/
Cheers,
Bev


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## arose

Thanks Bev! This extra insight truly does help.

Best regards,
Rose


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