Half my school package is benefits, which parts are taxable?
Take the package apart before you take a view. Accommodation, utilities, flights, tuition for dependants, medical cover and an end-of-contract gratuity are each characterised separately, and a benefit that is exempt where the school sits may be ordinary income where you remain resident. The pattern worth knowing is that school payroll systems are built for the majority of staff and apply one treatment to everyone. If your circumstances differ from the majority, in nationality, residence or immigration status, that default is unlikely to be your answer.
Does my school being a non-profit change my own tax position?
It can, which is why the question is worth asking rather than assuming either way. Some treaties and domestic rules contain exemption articles that attach to the employer status, such as a non-profit body, a cultural institute or an entity linked to a foreign government, and those articles can relieve remuneration that would otherwise be taxable where the work is done. The relief follows the employer, not the individual, so two colleagues doing the same job for differently constituted employers can be taxed differently. Establish what the entity actually is before reading the article.
My school withholds local tax, why does home still want a return?
Because withholding abroad and a filing obligation at home are unrelated questions. If you remained resident at home, that country generally taxes your worldwide income and expects the return whether or not tax has already been taken elsewhere. What the foreign withholding gives you is a credit to claim against the home liability, and claiming it requires the return you were not going to file. Treating the local deduction as the end of the matter is the most common reason school staff arrive with several unfiled years behind them.
Did renewing my contract end my treaty exemption?
Very possibly, because most of these articles are limited by time rather than by contract. A period expressed in years of presence keeps running through a renewal, so the exemption can lapse in the middle of a term while your payslip carries on unchanged. Two consequences follow. The income becomes taxable where the work is done from the date of expiry, and the year in which that happens has to be split. Check the expiry against your arrival date, not against the start of the current contract.
Are my children school fees taxable if the school waives them?
A waived or discounted place has a value, and whether that value is taxable income to you depends on the rules of each country with a claim on your earnings. Some systems tax benefits in kind on cost, some on a notional or market value, and some exempt a benefit provided to all staff on the same terms. The amount that ends up on a return can therefore differ between the two countries for the same waiver. Ask the school what value it has reported and to whom it reported it.
Do I have to file where my school payroll sits?
Sometimes, and it is a third question alongside where you live and where you work. International schools are often administered from one country, operate in a second and employ staff resident in a third, and a payroll location can create a reporting obligation of its own. Rather than assume, list the countries involved, establish what each one asserts over your income, and settle the order in which relief is claimed. Getting that order wrong is what produces double tax a treaty should have prevented.
Branch or subsidiary — which should we use to expand?
A branch keeps one taxpayer: results consolidate at home, losses are usable sooner, and the exposure is that the branch is a permanent establishment whose profit the host country taxes, sometimes with a branch tax on repatriation. A subsidiary is a separate taxpayer with limited liability and local rates, at the cost of withholding on dividends home and transfer pricing on everything between them. The deciding facts are usually expected losses, liability and exit plans. See branch against subsidiary.
What is double tax relief and how is it given?
Three mechanisms, and which one you get depends on your residence country's law and the treaty. Exemption leaves the foreign income out of the residence-country base. Credit taxes it and then subtracts the foreign tax, capped at the residence-country tax on that income. Deduction merely reduces taxable income by the foreign tax, and is usually the weakest. Canada and the United States lead with credit; several treaties give exemption for specific income types. See claiming the credit.
