Working for EU company while in the UK

[johnkk]

Here's an interesting question from a friend of mine who is thinking about applying for DCPR:

For the year of 2012-2013, he was living in the UK, while working remotely for a French company. That French company has no presence in the UK, and he was paid in his account in France and taxed there.

Would this year be a 'qualifying year' as a 'worker'? Or better put it down as self-sufficient and try to prove CSI and funds?

[noajthan]

Could go either way.

Probably one for the pub but what about UK taxes?!

[tmonaghan]

I know it's an old post but thought that an update could help anyone reading this...
Generally speaking you can actually be a resident of a EU Member state (Home) and work for up to two years in another EU Member whilst paying taxes in your Home Member state. Which means that your Home Member state Employer will pay your salary as if you were working at Home for up to two years. After that it become more complicated because of the Double taxation agreements.

Depending on the double tax agreement , you may have to pay taxes in your country of work as well as in your country of residence:

If you are posted abroad for a short assignment (up to 2 years), you will remain under your home country's social security system. However, the income earned during a posting abroad may be taxed in the host country.

When posted abroad by your company, you may not have to pay tax in the country where you work on the income you earn during your posting if:

You stay abroad for less than 6 months in a year and
Your salary is paid directly by your employer (at home), rather than by a branch or other company your employer has in the country where you work.

If you are an employee, the country where you work will, in most cases, tax the income you earn on its territory. If you live in one EU country but earn all or almost all of your income in another and pay tax there, the country where you earn your income should treat you as it would treat a resident - that is, it should give you the same tax reliefs and tax exemptions and any other tax benefits available to residents, such as personal allowances, or the possibility to complete a joint tax return with your spouse.

So if your employer declared your employment in the Host Country and paid taxes there too, period taxed in the Host Country could count towards PR for as long as you paid taxes in the Host Country. Otherwise your year spent working in the UK whilst being paid in your Home Country does not count.