Manage Foreign People in Italy or from Italy
We help you to check that hiring-out of employees is allowed and if so under what conditions: In some European countries, the hiring-out of employees is strictly regulated. This may be a matter of concern in secondment situations as the employee remains in service of his Home Country employer while he may receive instructions from the affiliate or subsidiary in the Host Country. In some countries (e.g. Belgium, Luxembourg, France) such situation is already regarded as a prohibited hiring-out of employees. Non-compliance with the rules on prohibited hiring-out of employees may in some countries entail criminal penalties and/or civil penalties such as the joint liability between the Home Country Company and the Host Company for all employment conditions or the deemed existence of a permanent local employment agreement between the employee and the Host Company. Sometimes the execution of a service agreement between the Home Country employer and the Host Company is recommended to reduce the risk of prohibited hiring-out of employees.
We help foreign Companies to be aware of any “minimum” local employment laws that apply despite the law governing the employment agreement.
Even if the Host Country is not considered the place of habitual work, some “minimum hardcore of local working conditions” may nevertheless apply from the first day of the secondment. This is a result of the local implementation of the Posted Workers Directive providing for the protection of the minimum working conditions in force in the Host Country despite the law governing the employment agreement. The following are usually considered part of this core: minimum pay rates, maximum working hours and minimum rest periods, minimum paid annual leave, maternity protection, non-discrimination, health and safety and conditions of hiring-out employees.
Our support area in tax application
We help you to be aware of applicable income taxes. First it should be checked if a Double Tax Treaty exists between the Home Country and the Host Country. If that is the case, then employees who are seconded for more than 183 days will most likely be taxable on their remuneration in the Host Country, at least on their Host Country sourced salary. However, it is of utmost importance to verify in each situation the Double Tax Treaty concerned as the wording and conditions may differ from Treaty to Treaty. Remeber that there are also very important differences in the level of income taxes on salary between the different countries. Furthermore the Companies takes the risks about "permanent establishment in the Host Country", specially in Italy. From our point of view, it is clear that depending on the situation concerned, the presence of the employee may under certain conditions be considered as a permanent establishment of the Company in the Host Country. This may give rise to additional (corporate tax) obligations for the Company in the Host Country.
Our support to comply with any other formalities
It should be checked if any other formalities need to be complied with. For example, in some countries (all Europe) the Home Country employer must notify the local Authorities of the Host Country of the employee’s secondment before the start of the secondment. Failure to do so can result in criminal penalties. Also, local language requirements may apply.