Hi! I am based in Europe and kicking off a new project with a US based company. Is there anything specific I should know about working with US clients?
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My clients are only US ones. Depending on what work you are doing, don’t start too early in the day. They will expect that there is some sort of overlap between CEST, and whatever time zone they are in. If it’s project-based work, then it doesn’t really matter, and you can be asynchronous with them. From an invoice perspective, you won’t be charging VAT, but make sure that you can bill in USD i (the right Xolo package). Finally, if you are getting paid in USD, be careful of where this money gets deposited because you can pay big fees at the banks. Instead, use Revolut or similar. Their FX rate is far superior to any everyday type of bank.
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Just a heads-up on double taxation issues. Since you’re based in Europe, you’ll still need to declare your income in your home country. However, you can avoid being taxed twice on the same income thanks to the Double Taxation Agreement (DTA) between your country and the US. It’s a good idea to check the specifics of the DTA and consult with a tax advisor to ensure you’re compliant and taking advantage of any available tax benefits.
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Hey Annika,
I second what Rory said, streamline how you get paid through Wise, Payoneer, or Revolut. US companies CAN transfer money to your SEPA account, but it’ll cost you a lot in currency exchange rates and a rather high flat fee per transfer, reducing your income. Revolut and Wise make it easy to manage foreign currencies.
US companies will request a W-8 form from you, since IRS will want to know if your tax liable in the US or not. The W-8 BEN is for individuals, the W-8 BEN-E is for entities/enterprises. The W-8 is important in avoiding double taxation also.
Depending on what company you work for, payroll can take a long time to process, so it can take up to a month or more to receive payment.
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Hi Annika!
Something that your US client could request you is your tax residency certificate in a country in Europe, this way they will be able to double check if there’s double taxation treaty and avoid applying any withholding tax in your bill payments.
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