Can my employer be taxed where I live because I write code there?
It can, and this is the part of the arrangement most developers assume is nobody's business but their own. A company can become taxable in a country where its business is carried on through a fixed place, and a developer working at a desk in that country, producing the employer's product, is capable of being that place. No office lease and no local company are needed. If the question is answered against the employer, it acquires a filing obligation and a share of profit taxable in a country it has never operated in. That is why an employer's first reaction to the discovery is often a change to your contract rather than a change to its own filings.
My employer has no entity in my country, how do I get paid properly?
There are only a few honest answers, and picking one deliberately is better than drifting into whichever the payroll software allows. The employer can register for payroll in your country without forming a company, it can engage a local employer of record, it can accept the corporate exposure and file, or the relationship can be restructured as genuine contracting with the consequences that brings. What does not work is being paid gross through a payroll that reports only to the employer's own country, because that leaves your income unreported where you live and the employer's position undocumented. Get the choice made in writing before the arrangement runs another year.
I am paid in foreign currency into a foreign account, what do I report?
Both the income and, in many systems, the account itself. Salary is reportable where you are resident whatever currency it is paid in and whichever country the bank sits in, converted to your own currency on a consistent and defensible basis rather than at whatever rate happens to be convenient. Separately, a number of countries require the existence of foreign accounts and assets to be disclosed once they pass a reporting level, with penalties that attach to the failure to report rather than to any tax being owed. The two obligations are independent. Meeting one does not discharge the other, and people who have paid all their tax still miss the second.
My share options vested after I moved, which country taxes them?
Usually both, in shares. Equity earned over a period is generally sourced across that period rather than at a single moment, so where the grant sits in one country and the vest in another, each takes a slice by reference to where you were working while the award was being earned. The complication is timing. Countries fix their taxing point at different events, and the old country often withholds at vest on the whole amount. Recovering the excess means a claim in that country, not simply a credit at home. Keep the grant documents and the working locations for the period between grant and vest, because the split is computed from them.
Does working for a foreign company from home create a permanent establishment?
It can, and the answer turns on the nature of the work rather than on the informality of the setting. The question is whether the employer's business is being carried on through a fixed place at your disposal in that country. A developer's desk, used continuously for the employer's own product, is a stronger case for that than the occasional laptop day. Some systems also reach the same result through an agent who habitually concludes contracts for the employer, which is why a developer who also negotiates is a different question from one who only builds. The determination should be made and written down by the employer, not assumed by you.
Do I owe tax where I live if my employer withholds where it is based?
Almost certainly yes, and the withholding does not discharge it. Deduction at source in the employer's country is that country's collection mechanism, not a payment on account to yours. If you are resident where you work, that country generally taxes the employment income earned on its soil and taxes your worldwide income besides. You then claim relief for foreign tax properly paid, and sometimes the correct answer is that the other country should not have withheld at all, in which case the remedy there is a repayment claim rather than a credit at home. Work out which of the two it is before filing, because the routes are not interchangeable.
Is "fund transfer pricing" the same thing as transfer pricing?
No — and if you came here to calculate FTP, this is not it. Fund transfer pricing is a bank's internal allocation of funding costs and benefits between its own business units, a treasury and asset-liability management discipline used to measure branch or product profitability. Tax transfer pricing is about prices between legally separate related parties across borders, and about which country taxes the resulting profit. The words overlap; the fields do not. See our transfer pricing work.
How much foreign income is tax-free in Canada?
None of it is tax-free for being foreign. A Canadian resident is taxed on worldwide income, so foreign salary, interest, dividends, rent and gains all go on the return, converted to Canadian dollars. What genuinely reduces the bill is the basic personal amount, the credit for foreign tax already paid, and any treaty article that exempts a specific type of income. The reporting thresholds people have in mind — the foreign property statement, for one — govern reporting, not exemption. See the foreign tax credit.
