I was reading an article about employees who are keeping up the facade of wfh when they’ve actually moved abroad to a place where the cost of living is cheap e.g Thailand. They align their work hours, meet targets, in fact no one would be any wiser.
The article went on to mention that it’s a nightmare for companies because of the tax implications. Can someone what the actual problem is. Thanks!
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Companies are legally required to pay taxes where they do business and where they employ people. So for example if you have an employee in NJ, you pay the NJ authorities taxes for your employee each month (by withholding them from their paycheck). The employee then files NJ taxes at the end of the year to correct any difference.
If you secretly work someplace else, say, GA, then that state is missing out of tax revenue, and is going to come after both employee and employer if they find out.
If you decamp abroad, especially to a poorer country, and do this, you are also stiffing the residents of that country, because you are using their society’s resources without contributing to their tax base. I see people saying, “well, Im renting an apartment and shopping, so Im contributing”, but that’s not the point since you should also be paying local taxes.
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