20th March 2023
What have we got in store for you this time? We always try to mix things up a bit as we endeavour to bring you the latest stories, this time focusing on the latest updates in contractor travel and job opportunities while reminding you of the need to remain tax compliant. As you’ll discover in our latest blog, opportunities for global contractors are really picking up across the EU as countries seek to bring in the talent and skills they need. Local tax authorities are not relenting in their fight to combat tax fraud, so recruitment businesses too must adhere to all local tax and employment legislation.
Our first bit of news concerns the postponement of the European Travel Information and Authorisation System (ETIAS), as reported by SchengenVisaInfo.com. Now you may recollect that we recently talked about ETIAS, the electronic system that tracks visitors who are visa exempt into the EU. As Anitta Hipper, the EU Commission spokesperson for Home Affairs, Migration and Internal Security, summed up, “The current expected date for ETIAS to be fully operational is 2024. The entry into operation of ETIAS can only take place five to six months after the entry into operation of the EES”.
As mentioned, the delay to the ‘go live’ date has been caused by the Entry/Exit System (EES), which logs the movement of non-EU nationals, and is being developed in conjunction with ETIAS. While the EES will likely be rolled out in 2023, according to the latest information, ETIAS should follow in 2024 with the concerns (including penalties for contractors) being addressed by eu-LISA, the agency that manages large scale IT projects. The objective of both EES and ETIAS is to dispense with passport controls, making the process quicker while maintaining security checks to safeguard EU nationals.
In other news, the new Spanish digital nomad visa introduced in 2023 and part of the Government’s Startup Act, is making a big splash. Many global contractors will be looking to take advantage of the new possibilities to work and live in Spain, a country that has always held mass appeal for workers given the amazing quality of life and cost of living benefits. There are strict requirements to qualify for the visa, though, which is open to non-EU nationals only. Furthermore, individuals, whether self-employed or employed, must not only be qualified in their chosen field, but also work for a company outside Spain.
There are other stipulations too. To be eligible for the visa, foreign workers need to prove that they have not had any criminal convictions in the past five years, they must obtain health insurance in Spain and demonstrate a solid work history (they need to have a relationship with a foreign company for at least three months). Those looking to apply for the visa must also earn enough to support their stay in Spain, which means they need to make at least double the minimum wage, which equates to €2,540 per month. For spouses and families, that amount goes up considerably, so be sure to do the maths.
While Spain is keen to attract foreign talent, particularly those with expertise in IT and tech related disciplines, as these individuals will serve the local economy, the benefits for digital nomads are equally apparent. As well as its famed warm climate, the cost of living is considerably cheaper while foreign workers can also enjoy favourable income tax rates with the visa allowing them to earn 20% of their income from Spanish companies too. There is so much to like about the digital nomad visa, which provides a ‘win win’ situation, both for its economy and the workers who decide to set up in Spain.
Beware the perils of tax fraud and non-compliance
Meanwhile, The Business Times, Singapore’s financial daily, reports that police have raided the homes of a number of employees of HSBC, the London headquartered multinational bank. The investigation by local authorities concerns the infamous ‘Cum-Ex’ trading scandal, which defrauded the German Treasury of billions of Euros in lost revenue as a result of a loophole (now closed) that allowed multiple investors to claim tax refunds on dividends that were paid once. Cologne prosecutors confirmed they were carrying out searches in the Düsseldorf area – HSBC has refused to comment.
Even though the trades date back to pre-2012, the ‘Cum-Ex’ Scandal continues to be big news, not just in Germany but around the world, given the sheer scale of the fraud committed and its global reach. Many of the world’s biggest financial institutions, including BNP Paribas, ABN AMRO, Barclays and BofA Securities (formerly Bank of America Merrill Lynch), have been implicated over the years. Hanno Berger, the lawyer and former tax inspector who was regarded as having been the mastermind behind the tax fraud, was extradited from Switzerland to Germany and sentenced to eight years in prison.
As our latest round-up reveals, opportunities abound for global contractors, particularly those from non-EU countries, to ply their trade and travel across the 27-country bloc. The rise in digital nomad visas, not just in Europe but around the world, has been a gamechanger for many looking for a better quality of life combined with a lower cost of living. But both contractors and the companies placing them must ensure that they remain compliant with local country employment, tax and immigration regulations. If you need advice, our 6CATS International experts can assist in more than 80 countries.
6CATS International is part of WorkwellTM Group
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