Working from Home, tax and Multinationals

Purple

Frequent Poster
Messages
10,182
Now that so many (all?) of the companies in the Silicone Docks, IFSC and similar around the country is working from home why can't home be India or China or Poland or wherever? With average incomes in the €80k to €100k bracket these jobs provide a very large wedge of our tax revenues. Given that "home" can be anywhere will working from home necessitate a rebalancing of our taxation system?
 

Leo

Moderator
Messages
11,633
There are tax implications for companies with staff living outside the state. The multinational I work for have made it clear remote working is here to stay long term, with a planned reduction in building capacity while taking on more staff, but they are very clear working from abroad is not an option.
 

ArthurMcB

Registered User
Messages
12
Same with my multi national. I think there a few tax amd legal implications for firms and employees if working outside the country where their employer is.
 

Dublinbay12

Registered User
Messages
131
There potentially will be an impact on the tax receipts, as multinationals offer salary reduction deals for full-time remote work for existing staff, and hiring strategies change.

Barbados have been quite clever, buy a visa and work from Barbados with no local tax implications to the Barbados revenue. A Clever idea as they just want the additional income people will spend to help replace the lost income from tourism.

 
Last edited:

Peanuts20

Registered User
Messages
225
Tax and legal is part of it. Hours of works, especially where the multi-national is supporting European clients is a 2nd one. If you're supporting European office hours from India for example, it's an evening shift which is more difficult to resource. Also turnover in the offshore countries is usualy way higher then domestic staff, hence consistency of delivery becomes an issue.

My experience is that it is the lower end "non-thinking" roles that tend to get offshored
 

Purple

Frequent Poster
Messages
10,182
Tax and legal is part of it. Hours of works, especially where the multi-national is supporting European clients is a 2nd one. If you're supporting European office hours from India for example, it's an evening shift which is more difficult to resource. Also turnover in the offshore countries is usualy way higher then domestic staff, hence consistency of delivery becomes an issue.

My experience is that it is the lower end "non-thinking" roles that tend to get offshored
What about the 25% of roles in the tech sector that are filled by immigrants with language and technical skills the locals don't have? Why bother bringing them here when they can just work remotely?
 

zephyro

Frequent Poster
Messages
143
What about the 25% of roles in the tech sector that are filled by immigrants with language and technical skills the locals don't have? Why bother bringing them here when they can just work remotely?
employment quotas to avail of the various tax avoidance schemes like CAIA? also the total % of immigrant employees is quite a bit higher than 25% in the big MNCs
 

DeeKie

Frequent Poster
Messages
656
Establishment tests can fail if a critical mass is not in Ireland, from a tax and regulatory point of view. MNCs were relaxed about this topic initially but now want employees back in the state.
 

Peanuts20

Registered User
Messages
225
What about the 25% of roles in the tech sector that are filled by immigrants with language and technical skills the locals don't have? Why bother bringing them here when they can just work remotely?
That is something a lot of companies will reconsider but for those in project/creative work spaces (and I'm speaking as someone who falls partially into that category), remote working is simply not as productive, far too much time spent on conference calls and less time spent brainstorming. Majority of overseas workers in Ireland at the high end are also European grads because there are no visa issues. From a cost saving perspective, their salaries would not be much lower in a lot of other European countries.
 

NoRegretsCoyote

Frequent Poster
Messages
1,677
What about the 25% of roles in the tech sector that are filled by immigrants with language and technical skills the locals don't have? Why bother bringing them here when they can just work remotely?
Because they are more productive here for a start.

They generate more profit in proximity to the IP and other skilled workers.

It helps MNCs pay corporate tax at Irish rates rather than (say) Polish rates.
 

Purple

Frequent Poster
Messages
10,182
Because they are more productive here for a start.

They generate more profit in proximity to the IP and other skilled workers.

It helps MNCs pay corporate tax at Irish rates rather than (say) Polish rates.
Yes, that's the big attraction but the OECD tax reform proposals may change that.
 

Dublinbay12

Registered User
Messages
131
That is something a lot of companies will reconsider but for those in project/creative work spaces (and I'm speaking as someone who falls partially into that category), remote working is simply not as productive, far too much time spent on conference calls and less time spent brainstorming. Majority of overseas workers in Ireland at the high end are also European grads because there are no visa issues. From a cost saving perspective, their salaries would not be much lower in a lot of other European countries.
For certain roles, 100% remote will work and I think overtime MNCs will adjust to this. The challenge arises for European employees working remote in Dublin, in a city that is not their home and which the cost of living is high. Not many are likely to upsticks and move rural and would rather work remote from their home countries (who can blame them?). This is really no different to say other companies outsourcing roles to cheaper countries, the tax revenues were lost.

What happens when local hires, want to go permanent remote work and move to a rural location? I think companies will start offering a reduced salary to go full remote in Ireland, so there will be an impact on tax revenues there. My logic for this is we have already seen the large MNCs do this in United States.
 

Leo

Moderator
Messages
11,633
I think companies will start offering a reduced salary to go full remote in Ireland, so there will be an impact on tax revenues there. My logic for this is we have already seen the large MNCs do this in United States.
They won't be so blatant about it, but most large companies have a good handle on the market and will aim to pay the least they can for the skills they need. If they have an open role that isn't required to be office based with two pretty similar candidates, they'll always choose the one asking for 10k less. Those who are currently on 'Dublin' salaries who move out will be best placed for a time, but may suffer later in terms of increments or if they look to move companies.
 

Drakon

Frequent Poster
Messages
870
Barbados sounds like the dream option but be aware that one of its Covid restrictions (currently lifted) was closure of all pubs and off licences for weeks on end.
If you fancy a bevy on the Barbados beach after a long day WFH, make sure you stick up. Just in case.
 

Peanuts20

Registered User
Messages
225
Remote working brings a whole raft of challanges for companies. For example, ergonomics and Health and Safety of the employee, only a matter of time before someone ends up suing their employer because they were told work from home, no H&S assessment was done, no proper chair/desk/screen provided and they end up with back issues and sue as a result. Onboarding and training staff is a nightmare if they are working from home. Monitoring outcomes and performance is also far more difficult as well as team management and communication to staff. It's not the panacea that many companies think it will be.
 
Top