Your MoneyQ&A

Can I work for my foreign employer from my home in Ireland?

Remote work across borders presents challenges, particularly when you have not told your employer what you are doing

Agreeing with your employer to work remotely is one thing; doing so from a different jurisdiction is something else entirely. Photograph: iStock
Agreeing with your employer to work remotely is one thing; doing so from a different jurisdiction is something else entirely. Photograph: iStock
Dominic Coyle's picture
Dominic Coyle
Tue Dec 10 2024 - 05:00

I’d like some advice regarding my current job situation to ensure I’m not doing anything illegal or risking future consequences. I work for a German company. Although I’m fully remote, I reside in Ireland.

To pay taxes, I use my friend’s address in Germany. Is this practice illegal? Would it violate any laws in Ireland, considering it’s an EU member state? Mr HL

I think you could be creating issues for yourself and your employer with your current work arrangements.

The advantage of remote working is the flexibility that it offers. No longer do you have to trundle into the office through the wearing routine of the morning commute. And, especially for those working in cities, where housing costs are high due to pressure on space, it widens accommodations choices in a way that might be more budget friendly or simply allow for better work-life balance.

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However, remote does come with some limitations. And, aside from the Covid pandemic, when some rules were set aside for practical reasons of infection control and travel restrictions, working from another country brings with it challenges that an employer may not be interested in engaging with.

You don’t say whether your employer is aware that you are working from Ireland but, given the use of a friend’s address of convenience, I assume not.

First up, this may mean that you are operating outside the terms of your contract of employment, leaving yourself open to disciplinary action or even dismissal.

More significantly, you may be unwittingly compromising your employer’s legal position regarding its payroll obligations in Ireland. You are certainly putting yourself the wrong side of the tax authorities, in my opinion.

[ Is remote working bad for productivity? ]

In general, a person will be taxed on their income in the state in which they are tax resident. And you become tax resident in this State if you spend more than 183 days here in a year, or 280 days across two years.

But that position can change if a person’s domicile is not Irish. Domicile is a tricky one. We are all born with a domicile of origin – the country we are born in – but it is possible to change this by domicile of choice. That’s not something you can do on a whim: it is essentially you saying that you have cut all ties with your country of origin and plan to consider another country as your long-term home going forward. And you may well need to support that position with evidence.

I don’t know your personal position but if you are not domiciled here, you are likely to be taxed only on income arising here and foreign income that is remitted to Ireland – that is, any that you bring into the State, say into an Irish bank account.

But if that income is earned from a foreign company but the work is carried out here, I suspect it will all be deemed subject to Irish income tax.

While there is a double taxation agreement between Germany and Ireland, it is not really designed for the situation in which you find yourself. It would be worth your while paying for professional advice on your tax position given the unusual circumstances but my view is that you are liable to Irish income tax, PRSI and universal social charge on your earnings.

And that cumulative tax bill will be different from what is being deducted from your salary currently by your German employer, as they are operating on the basis of German income tax and social insurance legislation, as well as the solidarity fund they operate to meet the cost of reunification and a church tax.

And your employer will probably also have to file details with Irish Revenue that will have cost implications for them.

Having got your personal tax advice, you will need to check formally with your employer whether they can or will accommodate your current arrangement. I suspect they might not if you are the only person operating here for them.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com with a contact phone number. This column is a reader service and is not intended to replace professional advice

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