BECOME A PARTNER
Co-Founder at Work From Anywhere
If you don’t offer some even limited element to work from anywhere, you could lose your best employees.
John is the co-founder of the Work From Anywhere team, a platform designed to help remote workers make work from anywhere a reality. He is a Chartered Accountant who speaks 6 languages and previously co-founded CultureMee, an intercultural awareness platform which won “Best Travel Technology Product” at the Global Youth Travel Awards in 2018. Prior to CultureMee, he was the senior finance leader of a €4 billion division of CRH Plc, a FTSE-listed company. John and his family are passionate about travelling and his eldest daughter, Rosa, is only 4 years old but has already travelled to 23 different countries.
You might have seen companies advertising ‘work from anywhere’ as part of their recruitment marketing campaigns. And as potential employees, it’s an incredibly appealing perk. But many workers and independent contractors are simply unaware of the impact it has on their taxes when it comes to where they reside, do their work, what their nationality is and complications of double taxation laws.
On this episode we meet Irishman John Lee, co-founder of Work From Anywhere. He joins Maddie on The State Of Work to discuss the implications and obligations of everyone’s favourite topic… tax! In his research when starting Work From Anywhere, tax often came up as the number one pain point for employees and employers and so they developed a tool to help remote workers to facilitate their tax risk and provide them access to a global marketplace of tax advisers.
Maddie and John discuss the many risks involved with tax, from digital nomads, business travellers, and of course, remote workers and also how the jurisdictions are hot on the toes of this accelerating world of remote work. The good news is that with planning, strategy, awareness and the right risk-assessment tools in place, remote workers are becoming more aware of their tax obligations as they navigate this changing world of work. Join Maddie and John for an enlightening discussion about the complexities of “working from anywhere”.
with John Lee
Maddie Duke 00:05
You’re listening to The State Of Work, the podcast by Lano. The set of work is about finding your place in the changing world of work as an individual or an organization. In each episode, we dive into some of the benefits and limitations we face when it comes to remote and flexible work. We discuss how we work, how we hire and manage people and how we live in this increasingly global workplace. I’m your host, Maddie Duke. And my guest today is John Lee. John is the co-founder of the Work From Anywhere team, a platform designed to help remote workers make work from anywhere a reality. Tax is one of the biggest barriers to the work from anywhere conundrum and John and his team hope to provide clarity about how individuals and businesses can make it work.
Alright, I’m here with John. Hi, John. Welcome to The State Of Work.
John Lee 01:05
Hi, Maddie. Pleasure to be on. Thanks for having me.
Maddie Duke 01:08
Thanks for joining us. John, where…how are you today and where are you joining from?
John Lee 01:15
I’m doing great. Today I’m joining from Limerick in Ireland, and have to say, I can’t complain. We had baby number three, three months ago a little boy had two little girls and yeah, so it’s pretty much a madhouse at the moment. But we’re all doing well.
Maddie Duke 01:33
Yep…awesome. Sounds like it’s probably a busy household!
John Lee 01:36
It is. Yeah!
Maddie Duke 01:38
And you yourself, you’ve worked in a number of different countries and you speak six languages. What are those languages?
John Lee 01:44
Yeah, I speak six languages. So I speak four of them fluently. I speak fluent English, French, and German, and Dutch. And also speak some Spanish and Irish – Irish is great when you’re going abroad if you don’t want anyone to understand you. There isn’t too many people that speak it!
Maddie Duke 01:58
Love it. Oh wir können auf Deutsch sprechen!
John Lee 02:02
Ja, das können wir auch machen, kein Problem!
Maddie Duke 02:07
Now, one of the first big questions I want to put to you today, because we’re talking about, you know, you’re the co-founder of the Work From Anywhere team. Are we in a “work from anywhere” world or is it just hype?
John Lee 02:20
Oh look…. it’s a great question. I mean, I think it’s fair to say there’s a lot of companies putting in place great marketing initiatives saying they’re allowing work from anywhere. But when you read the fine print, that’s where it gets interesting, because I think true work from anywhere – it is a myth, it’s not possible. You can’t…. I mean, unless you have a legal entity in every one of the 220 countries in the world. And even at that it’s got to be difficult. And true work from anywhere in the world is not possible. But I think what is possible is definitely picking, you know, having a strategy in place where you allow people to work for a period of time abroad, for example. And you have done a risk-based approach where you’re focusing on places where you either have legal entities, for example, or things like… for example, digital nomad visas, they’re not the solution to everything, but some of them are very, very useful, very attractive, they can be covered for the tax side of it as well, for the income tax. So there are different solutions and innovations that are happening both on the destination side, and on the company side – people trying to make this happen. And you’re certainly seeing with remote work, an increase of people working from home, then people say, well, if I can work from home, then why can’t I spend a couple of weeks working abroad? So that’s one thing we’ve definitely seen.
Maddie Duke 03:36
Do you think it’s only a matter of time before the world has to adapt to meet the demands of you know, of everyone wanting to be…wanting to have that flexibility?
John Lee 03:45
Well, yeah, it’s a two way, it’s a two way process. So for example, let’s say, let’s say you’re a very talented developer in India, we’re already seeing it now. For example, rather than them having to go and you know, become an expat and move to, for example, the US, they’re getting hired by the same US company, working at home and for example, for a lot of, for a lot of cultures that are very collectivistic, than for them, being close to family and friends is extremely important part for them. For them it’s the biggest employee benefit – other than pay – that you could be offering. So this idea of a global talent pool, I mean, that has huge ramifications for how we hire people. But then on the work from anywhere side that, yes, people will have a home base, but I think having some kind of flexibility will lead people to either spend some time at home and family, for example, if they are living in the US and want to spend some time with their family. It could be for example, in India or wherever it might be. Or if people that say, for example, from a from from, let’s say Ireland want to go and spend, you know, a couple of weeks in Thailand, for example, working there, if you can facilitate that, if you can offer that well it’s a great way to make your business stand out. And we’ve already seen some companies offer work from anywhere “months”. Example, where they’ll offer a certain number of days if they’ve no legal entity there. And they’ll offer maybe more days if they do have a legal entity there. So there are companies that are actively trying to tackle this. And we’ve seen it out since from Facebook and Google and many more as well, that are really trying to offer this to a cohort of their employees that say,
Maddie Duke 05:19
We’ve spoken on the podcast before about what some of the biggest compliance issues are, when it comes to sort of working from anywhere or working remotely or working, you know, whatever it might be. And one of the biggest challenges or barriers is tax complexity. And, you know, I’d like to talk about individual tax compliance first, so many people might be unaware of the impact on their taxes when it comes to where they physically work. And we’ve got, you know, a percentage of people that are really for that digital nomad and traveling working style, that’s obviously not for everyone. But there’s a lot of people that are looking to do that. And then also people who are looking for remote opportunities in jobs and employment that allows them to work from different places. I want to mention the tool that you offer on your website and workfromanywhere.team. So you’ve got this fantastic tool, where you can essentially put in where you’re a tax resident, and how long you might want to spend somewhere and you’re presented with all the different options where you could legally and compliantly work in all these different countries in the world. Would you like to maybe tell me a bit more about that tool and explain to listeners how it works and how it might be useful for them?
John Lee 06:34
Yeah, so you mentioned a couple of points there. So we first started off with the digital nomad visas, or digital nomads in general, sorry. So what’s fascinating is that pre-pandemic you had give or take about 7 million digital nomads and post-pandemic, they’ve gone to 12 million, They’re very, very small parts of the market. Digital nomads are defined as people who are typically going abroad or young people maybe 20 to 25 years of age, they’re going abroad on leisure travel visas, they’re not declaring their income to the local tax authorities, for example, they’re technically, you know, working illegally, and evading taxes. They’re a very small percentage of the market, you know, maybe 1% of the global travel market, max. But the market that has just exploded is the remote workers who want to travel abroad, be they for example, expats – going back to the case of an Indian expat in the US who wants to go back and spend time with the family. Or, for example, somebody from either the UK or US that wants to go to that beach in Thailand, for example. Those are more workers, you know, we’ve all seen they’re a huge part of the market, and a lot of them are going to want to be able to work abroad or have some flexibility on that. So you know that that’s the market that is going to be so much bigger than the traditional digital nomad market. And that’s the market where compliance will be much more of a focus, because they’re typically people that work for employers. And they’re people that will be there for quite a period of time, probably in one country. And so the risks are much more significant. What we’re also seeing is jurisdictions are getting much, much more aggressive and much, much more focused on these people moving into those countries. And this is a tax base that they could be losing, for example, or gaining either side. So it was more of a focus on the restrictions and that side. So the idea of the Work From Anywhere team, what we’re trying to do with – that’s the tax risk tool that we have, is to put in place a very simple tool that can allow you to see what level of risk is there. So if I’m going, for example, from the US or Thailand or from India to it could be Germany, or wherever it might be, what’s the risk that I have in terms of tax residency, and the reason that’s important is that in some countries, if you go there for 30 days, you can potentially become tax resident, which has huge implications and other countries, you can go 300 days, and you actually won’t become tax residence. Now, you’ll still have other potential obligations, things like social security, whatnot, but the key one, which is income taxes, you know, if you become a tax resident in a country, it has massive implications for you, it’s much more risk, just the dynamic changes. And so what we tried to do with the tool is basically link, basically, where you’re going from where you’re going to, if they have a double taxation agreement in place, that reduces the risk, for example, also looking at the days of the destination country, again, it is a 30 days or 365, what’s where does that fit into it? And we’ve another couple of elements in our algorithm to help people understand what the risk would be, and that helps you understand okay, is it low, medium or high risk? No, it’s still risky in regards to what you do. But if it’s very high risk, well, you probably say it’s not such a good idea to you know, if it’s medium risk, well, you definitely need advice. If it’s low risk. Yeah, it’s that this is just the tax side is one piece of risk. There are other risks like employment law, things like that, for example, but least you know, from the income tax rate is likely to be not a major risk. So I think we did our surveys, tax came up as the number one pain point for employees and employers. So this is a tool to help facilitate that for remote workers. And then we use that to provide people that access to a global marketplace with tax advisers.
Maddie Duke 10:16
It’s such a valuable tool for people, you know, planning ahead is, you know, you can kind of understand what your risks are and mitigate those unpleasant surprises that might come up, if you’re not planning ahead and thinking about these things. What are some of the biggest complications? Is it, sort of, simply, oh, I might have to pay tax for six months in this place, and then three in another and 30 days in another country, you know, if you’re spending time in multiple different jurisdictions throughout the tax year? And actually, that’s another question, because the tax year is not the same globally. You know, is that kind of the biggest risk or what could be the biggest thing that might happen, or the biggest complication?
John Lee 10:58
The most important thing is to plan ahead. I mean, we’ve seen examples, a couple of different examples of, you know, big companies, where employees literally, you know, during a pandemic went back home for a year to their home country, and didn’t tell their employer for over a year afterwards. And then all of a sudden, there was a huge tax residency, massive tax residency, headache, I mean, that has happened to a lot of different companies. We’ve also seen as well, in some cases for, you know, for contractors, or digital nomads or whatnot, we’ve also seen risks of people just, you know, having a could be a it could be a company in the US, but then they decided to go and live in Indonesia, or Thailand or or, you know, or Spain or wherever it was, and they didn’t tell the local tax authorities and and then all of a sudden, now they’ve got a huge potential tax liability to deal with. And again, the way I would liken it to is it’s a bit like driving on a motorway, and what’s your risk appetite? You know, you know, driving, if there’s a 120 kilometer speed limit, if you do 121 kilometers an hour, you know, are you technically driving illegally over the speed limit? Yes. Yes, you are. Do we all do that? Sometimes? Yes, we all do, let’s say. But the problem is, from a tax perspective, it’s a bit trickier. Because, you know, if you’re driving 130 140 150, and 120 area limit. The problem with the tax side is that if they get you there, they’re not just going to look at your last year’s earnings in that country, they’re going to look at your last five years, right, and I’m not just going to get the back taxes, there are going to be tax penalties and everything, you could be jailed, you know, and there’s other penalties beyond just tax that you can be gone for as well. So the problem is that, while digital nomads were a small part of this market before, they didn’t really demand local tax authorities having huge resources to go after them. The difference is now two major things are coming together. First of all, now, this is a big tax base for a lot of countries that are losing or they’re going to lose their tax base after the crisis. But secondly, as well, the digitalization of these US and tax authorities databases as well, we’re seeing a lot of countries implement digital visas, so that when somebody comes into the border, they can track that. And for a lot of countries, just connecting that to the tax, let’s say database or infrastructure, that’s still a big step. But that is something that’s going to continue to happen and evolve, and more countries are going to do that. And if they do that will straight away, if you said, you’re here in the leisure travel visa, and you’ve… you know, and you’re actually working there, all of a sudden, you know, it’s a big risk to run, and it’s a higher risk that you’re gonna be running into. So that’s, I mean, just some examples of some of the risks that you could run on why is becoming more important.
Maddie Duke 13:40
And there are risks both for you know, the individual, whether it’s a digital nomad or an employee or a contractor, well, yes, the business itself, and we will go more into that business side. But yet some pretty big risks.
John Lee 13:55
What is one of the things that we put together is the work from our compliance framework that can be a resource you might want to share with the audience as well. It shows the holistic nature of the different risks. So if we’re going to go through them at a high level, you’ve got, for example, personal income tax and Social Security. Yeah, that’s on the personal side. But then you also have corporation tax and permanent establishment is a major risk as well. You’ve got immigration, visas, and also employment law, you’ve got insurance and duty of care, but also on the talent management and benefits side as well, if you don’t offer some some even limited elements of work money where you could lose your best employees, and then you’ve got data privacy and security. I mean, there’s some of the key risks that you can run into, that you need to be aware of.
Maddie Duke 14:41
Yeah, so important to think about. And one question as well, you know, we’ve got companies like SafetyWing, for example, that covered digital nomad insurance and you know, helping digital nomads be insured across wherever they’re going to be working and traveling. Do you think that we’ll start to see similar offers for individual tax services. So companies that are helping remote workers and digital nomads kind of get their tax done in all those different jurisdictions and understand their kind of global, or all comprehensive tax obligations.
John Lee 15:18
Yeah, great question. So,to break into a couple different parts. So you said on the insurance side, SafetyWing, do a great job. And you’ve also got Insured Nomads as well, there’s a couple of companies that are coming out that are offering us tailored insurance aspects. For those there’s no buts which is really, really important, because it’s a very different needs that those people have. Going back into the tax side, you have to break into a couple of different points. Because, for example, the employees of record have a very important role to play for, for the individuals that are looking to be employed in a foreign payroll, for example, in solving those issues for companies. Contractors, as well have, you know, the growth of people using hiring people to contractor model as well, has really grown. But that brings with it its own misclassification risk for the employment law perspective. But the big problem is that you have the kind of gap that you have a little bit of the market right now, is that by sending remote workers abroad, companies potentially trigger a massive permanent establishment risk. So it depends on the aggressiveness of corporation tax, in that particular country of destination country. But in general, when it comes to a permanent establishment, does a couple of key things you’ve got to bear in mind, if you’re sending a very senior director or group of directors abroad to a country like the south of France, and they spend a significant amount of time there, then potentially, potentially, those tax authorities there may have an argument to make, hold on a second, we deserve a percentage of that company or divisions, corporation tax profit. Likewise, if you’re sending a bunch of sales team members, like senior sales executives, that are going out generating services from their country, to the south of France, again, again exactly the same amount of people can have the ability to do employment contracts in that country. So there’s a couple of different factors like that, that mean that you can all of a sudden, have a major corporation tax risk. And this isn’t really discussed about a huge amount in the whole remote worker and the worker money argument. And you do need people that saw that. So I think that’s why you’ve got, for example, the big four that advise on the big corporations. But you will see a big growth in the space of people that offer on the one hand the personal income tax advice, but also the corporation tax advice.
Maddie Duke 17:38
Lano makes it easy to hire the best talent on the planet. Companies of any size can hire and pay employees in more than 150 countries, backed by a network of top employers of record. Lano takes care of compliant contracts, local tax law and international payments. From full time to freelance the Lano platform has everything you need to grow your global team, find out more lano.io. Looking at it from someone who’s not as someone who’s not that familiar with all of the complexities, you know, you can see that this is just the tip of the iceberg. And there’s so much to consider. And if we come back to that idea of like a service provider that takes care of tax related services in multiple across multiple different countries and jurisdictions, it seems like an impossible feat. It will be interesting to see how this develops, I guess.
John Lee 18:36
Well, I, to be honest, it does seem like a lot does seem like it’s overwhelming. But honestly, it’s all about having a risk-based framework in place and weighing the costs with the benefits. Yeah, so let’s talk through that a bit. If you’re a Fixed Manufacturing Company, or a highly regulated financial company, you’re never going to be able to offer work money or that’s, that’s done. Let’s forget about, you know, maybe for your back office or marketing teams, possibly, but in general, you will never be able to offer. But for the companies that will, what you need to do is you need to weigh up. Okay, well, what’s important is this is employee benefits. If you look at the Netflix company culture, well worth a look. And what they talk about is basically, for the top, let’s say for the average company, the top performers are going to be two to three times more productive than the average performer. But for highly creative companies in industries, like technology like entertainment, the top performers are 10x the productivity of the average performer. So that’s why for example, you see in Google, for example, Apple, they’ve got all these fantastic offices, and they’ve got the beanbags and the great cafe, the food and the ping pong table. Yeah, that’s why they’ve done that because to get the best people for them to return is massively significant. I say my argument from work money or perspective. You know, for those people, there is those top performers that your 4k monitor is extremely important to them, I the compliance costs for helping solvers in a focus way for a focused number of countries will be will be far less than the employee benefit return, you’re going to get to a company of offering it to those, you know, to those companies, particularly if you’re employed, if your competitors are doing it, if your competitors are doing anything like this, you know, it’s crucial, you’ve got some sort of strategy in place. So the critical thing is to put in place a risk-based framework where you’re looking at the totality of the risks for personal income tax, social security, cooperation, tax, employment law, etc, etc. And then you at least have, you know, a filter in place, we’re able to see, okay, in this scenario, it’s going to be high risk, we’ll never be able to do it. For this one, it’s medium risk, if it’s a significant employee benefit, we will have a look at it, versus low risk, like I give an example of low risk, you know, you’re a business traveler, you’re going abroad for a day, you know, that’s extremely low risk in that scenario, you know, but of course, the other scenario than if you’re going working abroad in Thailand for for 10 months, of course, that’s going to be a massacre. So but it’s about having that kind of risk-based framework in place, so that you can manage it and measure the return against the, against the customers.
Maddie Duke 21:15
And so how, like, so if a business is planning to expand globally, and they’re starting to look at hiring abroad, or establishing themselves in a new market, how, how can they navigate local taxes and their tech tax obligations? Like what sorts of resources are there?
John Lee 21:35
Oh, yeah, good, good question. So, you know, a lot depends, when they’re expanding internationally is, how many people do they expect to hire in that country, you know, is it going to be a real strategic base for that, for that company, meaning if it is the options, or they can set up a legal entity, for example, or potentially a branch, you know, there’s a few different options that they that they can do, certainly, if it’s a strategic location, they’re going to be hiring, but then they need to set up a legal entity, you know, but then also, you know, the the evolution of, of employees a record have played a really important role here as well, you know, depending on the nature, if you want to be able to put people on a payroll, but you don’t want to have the hassle of setting up a legal entity, depending on the nature of what you’re looking to do, as far as a record may be able to come in there and play very, a very positive role there as well. So, you know, we’re seeing some very exciting evolution, this is a very fast moving space. But you have to look at the totality of the risks, you can’t just look at it from an employment from, let’s say, a personal tax perspective, you’ve got to look at it from a corporation tax perspective as well.
Maddie Duke 22:40
And so when an employee is hired via an employer of record, and just to kind of recap for anyone that’s not quite sure, an employer of record is almost like a, it’s an entity in a in a particular country that can employ a an individual on behalf of, you know, the parent, the the actual employer, basically. And is employer tax typically included in the fees of an employer of record?
John Lee 23:05
Great question. So to be honest with the employer’s record, they’ll typically have the payment process facilitated where you basically press a button and all the taxes and everything will be looked after. So they look after the totality of everything, for a personal income tax perspective for the employees and the employee, let’s say tax and payroll, but also the employer portion of it for that, but they won’t take care of corporation tax. That’s not their wheelhouse. They don’t deal with that. Yeah, their job is to make sure I would expect for the employees record to look after the personal income tax, and be.. make sure you’re compliant with employment law. Absolutely critical on that side, but they won’t take care of corporation tax that’s not in their li-, that’s not in their specialization. And they don’t want to take on the liability that’s why you need specialist tax advisers for that, huh?
Maddie Duke 23:54
Yep. Do you think employers should take on the burden of sorting out text complexity for their employees?
John Lee 24:01
Yeah, 100% employers have to. I mean, at the end of the day, you can outsource parts of the puzzle to different people, but you’ve got to take responsibility yourself in house for what your tax, you know, your holistic tax strategy is, and linking it to, for example, the other risks like employment law and beyond, you know, the nature of work, money work, the nature of expanding internationally, is that it’s got to be done in a cross-functional way. You know, you need IT, you need tech teams, you need HR. Yeah, employee benefits, global mobility, business, travel, legal and tax everyone to be singing from the same hymn sheet. What’s really obvious in all this is that it’s very easy to make a mistake that can really cost you if you don’t plan it in advance. So having a very clear strategy is non negotiable with this. Because it’s one slip up is all it takes, and I think the practices that companies got away with, you know, two, three years ago will not be the practices that people can get away with in the coming 2, 3, 5, 10 years.
Maddie Duke 25:03
Hmm. And I mean, we talk a lot about planning and kind of planning ahead. Last year, for example, in 2020, a lot of you know, there are a lot of people who ended up either yeah, as you said earlier, going home and maybe not telling their employer, so maybe going home, even to a different country, or even getting stuck somewhere for a period of time that might have ended up being past that deadline, where you then become obligated to pay taxes in a location where you are. I don’t know how to put this, I guess. But like, what, what what’s happening there like that, I mean, that must just be a mess for some people, for some businesses, and and those individuals, I, myself got stuck in Australia, actually, for a period of time, and I’m yet to kind of figure out what that means for me.
John Lee 25:55
Yeah, look, it’s a great point, I think, at the end of the day, part of the challenge here is really about awareness. You know, it’s one thing for the tax team, or the CFO to be aware of the risks, or the global mobility person to be aware of the risks. But it’s about filtering down that awareness. Okay, here’s a strategy. Here’s our traffic light system of the risks of the different scenarios, and having very simple, straightforward user free tools. So everyone is aware of it. I mean, if you’ve got a nice, you know, to mobility strategy, or working on your policy, whatever it is, but the managers are not aware of it, and the employees are not aware of it, then it’s a complete waste of time, because you’re gonna have so many these scenarios. So it’s critical that you’ve got good awareness sessions and education sessions and workshops, and you’re making aware of your work minor policy and the practical implementation of it. If you can do that, it’s going to it’s going to prevent a lot of these major risks that can transpire because the big thing is that if you do it in a world in a very focused way, there are ways you can like, for example, digital visas give you one example, some additional visas, they cover you for income tax, that means that you can actually work in that country, whatever, without having to pay personal income tax in that country. Yeah, and you’re not even allowed to be employed by a local employer, you can be employed by your employer, let’s say you’re going to, for example, Aruba, and you’ve got your employer in Germany, you won’t pay personal income tax in that country. That’s a huge, huge benefit. It simplifies things massively. But so the point I’m trying to make is there are, you know, there are ways to tackle it in a very focused way. That doesn’t mean you have to reinvent the wheel, or cause massive, massive amounts and in compliance costs, but the most important thing is you at least assess the risk beforehand, you are aware of the potential risks that you can run into. And it’s critical to get the awareness out there.
Maddie Duke 27:53
Yeah and not being afraid and just sweeping it under the rug. But actually looking into it.
John Lee 27:57
Exactly. I mean, honestly, we have heard stories of, you know, of HR departments, you know, telling an employee who wanted to go to South America, basically saying that, oh, yeah, just leave your current address. Let’s say for argument’s sake, we’ll call it Texas, put in your parents address in Texas, and we will keep paying you and ask them to US Bank Account and off you go to South America for a year, and we will say nothing more, I just can’t. There’s a tremendous amount of ignorance, even from HR teams, but I would say most HR teams, and most certainly all finance teams, are global mobility teams are aware of these risks of becoming more aware of it as well.
Maddie Duke 28:42
Yeah. So ultimately, I mean, I think offering you know, we’ve talked a bit at the start about lots of different employers are, especially in their recruiting recruitment campaigns, offering or claiming to offer remote work or work from anywhere options. And, and it’s certainly becoming, you know, a big part of either employee branding, employer branding, and also the ability for employees to remain competitive in that world and attract the best talent. Do you think that employers should therefore be afraid of what they’re claiming? Or is it just about, you know, looking to people like you who can kind of advise them, advise businesses on how to do it well and properly and how to mitigate that risk?
John Lee 29:30
Great, great point. So if we talk about that, while it’s true, that true work from anywhere is a myth in the sense that you can work from anywhere in the world where you want whatever you want at your decision, that’s just not possible. Against that, though, there has actually been work for money or pre-pandemic anyway, I give an example. business travelers, people that went abroad for, you know, 10 days at a time. That’s not a huge risk going abroad for 10 days. It’s really not, I mean, it’s the absolute minimum, that’s technically working from anywhere. We’re also expats, expats going abroad, permanent transfers, that work from anywhere. We’ve always had expats. That’s nothing new. But rebranding, putting those two elements into a work for money or policy. Now, you’re supplemented with the digital nomad visas that cover you from tax, for example, straightaway, you now have, you know, the business travelers working less than 28 days, the expats more than a year, digital nomad visas for people who want to work for more than 28 days in less than a year. And then maybe it might look at your existing legal entities where you can facilitate some, you know, intercompany, employee transfers, for example, short term assignments, things like that. Now, all of a sudden, you’ve got the shape of a very doable work for money or policy. at same time, though it has to be looked at on a case by case basis. That’s unfortunate, unfortunate part is that you have to look at, you know, for example, the double taxation agreements between the countries, for example, you know, the visa side, as well as dependent on the nationality you’re from, you’re going to, you Bhagyashree often talks about the potential discriminatory challenges around that as well. You know, if you do this in a half hour, if you don’t think this through, then can of course, lead yourself to… has a well thought through you got to cover the employment law perspective of us, the corporation tax, the individual tax, and the other risks I was speaking about as well. And social security is the one that often gets forgotten about as well as social security in some countries is 0%. In some countries, it’s like 45% of the salary can be a massive difference. So when that’s when that sweeps under the radar from time to time as well. So at least by thinking about it in advance, and putting in place a framework, a traffic light system in place, you need to be better prepared for at least making sure you focus on the higher risk scenarios.
Maddie Duke 31:47
Thank you. Yeah, that’s, yeah, that’s exactly right. I wanted to ask, before we wrap up as well. What do you see as the future of this, like, what, what’s the future of work from anywhere? Do you think that one day, we’ll be in a kind of perfect work from anywhere world or?
John Lee 32:04
The future work from anywhere is linked to the future of remote work. And, you know, from what we’re seeing from the future of remote work, remote work is not a passing fad, it’s here to stay. And it’s really fundamentally shifted the dynamic in many companies. I mean, we call it the inversion of the other pyramids, basically, where you had a traditional structure in the past couple of 1000 years where you had the boss or the CEO, or the tribe leader at the top of the pyramid and told everyone else what to do at the bottom of the pyramid. Whereas basically, in March, April, this year, the biggest companies in the world have told our employees, we’re going back to the office in September, what happened? The employee said, No, we’re not going back. So that, for the first time in the history of work across all industries, the employees, they said, No, our value system has changed, we’ve realized the importance of being close to family and having worked flexibility, we’re not going back. And so that’s it. Now, of course, there are certain industries that have no choice like in manufacturing, or how to regulate financial entities. But in general, this trend of work flexibility is more certainly here to stay, it won’t be for every single company. But for a lot of companies that will be and where they sit on that kind of one will be fascinating. So for me, I see that real work being structural, also linked to the fact this work from anywhere side of it, and the global talent pool, people are going to be hiring from beyond the 50 kilometer radius of their companies. And people are going to want to have access to being able to work for a period abroad, maybe it might only be two weeks. But maybe it might be three or four months. And the evolution of digital nomad visas is going to further accelerate that. So I think we’re in a little bit of a holding pattern. Why? Because people aren’t traveling yet. But I think in six months time, either sent in nine months time or a year’s time as the world reopens, this is going to be something that becomes more and more important. And certainly the sense we’re getting as employees are really pushing people for this. They’re pushing their bosses, their managers, their companies to say, look, if I can work from home for the whole year, fully, virtually, why can’t I just go and spend some time abroad? You know, of course, they’re not aware that that creates a whole bunch of personal income tax risk for themselves and their companies as well. So it’s not quite that simple. But there is definitely going to be an increasing push for employees to look for this.
Maddie Duke 34:31
Absolutely. I think you’re spot on there. And it’s going to be a really interesting thing to watch over the next years to come. Well, thanks so much, John. It’s been really, really interesting and very insightful. I really appreciate you taking the time to join us to kind of explain some of the scary world of tax and help people to understand that it’s really just about looking into it, asking the questions and finding the answers so that you can plan ahead, too. Avoid or manage that complexity of the in quotation marks “work from anywhere” world. So thank you.
John Lee 35:07
Thanks for having me mighty appreciate it.
Maddie Duke 35:15
The State Of Work. is available wherever you listen to podcasts. You can also find us on Instagram or Twitter by searching for “the state of work” for help navigating the complex tax world of work from anywhere head to wfh dot team. And for more information and links to further rating, check out our show notes at podcast.lano.io Thanks for listening and see you next time on The State Of Work.
© Lano Software GmbH 2023