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Comment by moonchrome | Hacker News Reader

Does anyone know a good site where I can compare tax rates for freelancers - using a single person business what's my net take home at what income ?

Would people be willing in contributing this info for their country if I made a calculator for this on GH pages ?

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You also need to watch out for "false freelancer" laws in the EU, meant to protect workers who should receive full-time benefits from the company. It makes freelancing a gray area when you have a repeat long-term client.

Yeah that's a useful note, although that's not on EU level, I'm in a EU country and the tax authorities are extremely vague about this.

I know people who worked like this for a single client for >5 years, and the only cases I've heard of it being audited is when workers actually complained about these schemes denying them employee rights (it was never in IT).

And like the other sibling mentioned on international clients it's even more vague.

These never apply to international clients AFAIK. At least in the UK that's the case.

In France, this is usually an issue for the client, because the contractor can then ask to be considered as a full-time employee [0]. As a freelancer yourself, if you don't involve the state, they won't come after you. The idea of the law is to protect the employee.

However, speaking of freelancing in France, legally, there isn't such a thing. You have to have some form of company. There is some paperwork, but all in all it's pretty easy and quite fast (by French standards).

Taxes are high, though, so it may not be the best place to incorporate. It should also be noted that anything above basic social security isn't free nor included in said high taxes, so you'll have to pay out of pocket either for a complementary insurance or for the hospital if you need it, although I think it may be cheaper than in the US.

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[0] Some criteria have to be met, but basically if you're working full time several years for the same client, you can ask to be considered a full-time employee with a full employment contract, etc.

> It should also be noted that anything above basic social security isn't free nor included in said high taxes, so you'll have to pay out of pocket either for a complementary insurance or for the hospital if you need it, although I think it may be cheaper than in the US.

Complementary insurance (mutuelle) isn’t all that expensive compared to the US. I cover myself and two kids for €118 a month - very reasonable considering I pay very little out of pocket for any care or medicine during the year.

For US citizens, be really careful with freelancing overseas. You will probably need to file US self-employment tax statements quarterly, and face some scary penalties if you forget.

Important addition I'd like to add here is that you almost certainly won't owe any US tax. You just need to file the return. AFAIK You get a crazy high deduction and can also deduct all your local taxes, so it's almost always 0 or near 0 taxes owed. That said it can be expensive to actually prepare and file the return, as you need to find a tax specialist proficient in Local AND US tax law to prepare it for you and they charge higher than normal rates.

Another thing to know is that the US imposes worldwide reporting requirements on banking institutions for their US citizen customers. This problem is far less severe than it initially was, but depending where you go some banks/institutions may deny or restrict your access to financial products because they don't want to deal with the reporting requirements attached to you. Again, it's probably fine anywhere in Europe (nowadays anyway), but elsewhere in the world it may be extremely difficult to do something as simple as get a simple checking account.

Not zero for self-employed folks. Self-employment tax (Social Security and Medicare) is unaffected by the Foreign Tax Credit or the Foreign Earned Income Exclusion. Unless you're paying into a foreign social security plan in a treaty country, you'll owe that 15.3% tax.

https://brighttax.com/blog/expats-self-employment-tax-foreig...

Would be happy to contibute to something like that for France, though there are a couple of different ways of setting up a freelancer business that impact that number here.

Right, I think that's the problem. Things get complicated so I'm not sure there's a single answer. Usually the easiest way to do things is to just declare everything as normal individual income. Dealing with corporate taxes is a whole ball game.

The difference in Croatia can be >20% of gross and it isn't much more work than reporting your individual income, the only gotcha is shutting down the legal entity takes a very long time.

it often isn't so easy. In many jurisdictions, there needs to be a system to make sure the proper social taxes are paid.

In a 'normal' employment situation these are handled by the employer. As a freelancer, no. So the law requires some additional structure to make sure these taxes get paid.

If you simply declare your freelancing income as 'normal income', you are not paying these taxes, which probably makes you guilty of tax fraud.

Also, if you are freelancing, you may be required to charge sale tax or VAT or similar. In the EU, you need to be VAT registered to collect VAT. As an individual, only certain countries allow this, but only if you have a business license in that country. Otherwise you need a corporate form, or you are commiting tax fraud.

Just because you take the income personally doesn't mean you don't pay taxes or collect VAT. You absolutely do, the difference is that after the business is cconducted you pay income tax rather than a company paying a corporate tax rate. Taxes are paid in one spot, not multiple spots. It's not always the right answer, but it is definitely simpler.

Here are the numbers for Germany: https://allaboutberlin.com/guides/start-a-business-in-german...

PwC has a nice overview of individual and corp taxes by country. https://taxsummaries.pwc.com/

This site will calculate your take home pay after tax in many European capitals: https://freelance.tax

If your income is high enough to be paying 5 figure taxes, check out Nomad Capitalist. They specialize in legal tax reduction through global residency.

> They specialize in legal tax reduction through global residency.

Dodging taxes. They specialize in dodging taxes.

If it is legal, why is it dodging taxes ? As an individual, I want to maximize retaining my hard earned earnings and nothing wrong with that in my opinion as long as you do it legally.

People really need to start seeing taxes as a good thing.

Tax-funded health care saved my brother, when in his early 20s a brain anuyrism required north of 100K in medical bills-- paid for by the State of MN because he didn't have health insurance at the time.

He would have been bankrupt for life without that. Or dead.

Tax funded health care has saved my wife's life twice.

I find it debatable as there are countries with high corruption which have bad uses of people taxes.

> Dodging taxes. They specialize in dodging taxes.

Not really. Their Schtick is to move to a different low cost of living country and live there.

Preferably several - one for the summer one of the winter and another for fall/spring.

It’s more radical lifestyle design than “dodging taxes”.

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