Since having my VA business I have been through countless countries, with different systems and different accountants – and pretty much been through every rule and regulation there is.
The one major problem I had was that no accountant could really understand my business model, and to my regret, many times I have also received unnecessary and very large bills for my business because the accountants were treating my business like any other… But if you are a Virtual Assistant, your business is not like any other.
So what are the fundamental differences between a majority of Virtual Assistant Businesses in comparison to your average solicitor, baker or the man who comes to mow your lawn?
You could at any time be in receipt of “Foreign Earnings”. Foreign earnings is basically income from any client and/or clients you work with who are not in the same country as you, and therefore you will be paid from abroad.
One of my personal choices which I have followed for a long time is to live in a country where I don’t do business with anyone inside that country. So for example – I could be living in Gibraltar and only do business with British and American residents in their respective countries. That would mean that every billable hour I invoice for is classed a foreign earnings, and many countries will tax foreign earnings differently. You must always declare your foreign earnings, but there is a chance that this money will be treated differently to the money you earn from the clients who are in the same country as you are. This could be from something as basic as foreign tax credit relief, to in some cases low or NO tax on foreign income, depending on your circumstances.
So onto the one question which you should be asking your accountant, if you intend to work as a Global/International Virtual Assistant – and you are not going to restrict yourself to only working with clients in one (your own) country.
“What Are The Tax Rules Applicable To My Business On Foreign Earned Income?”
Unless you tell your accountant that you have clients paying you from outside the country it may not ever occur to them, and this could save you money on your next tax bill!