Freelancer in India working for Swiss Company
"As you are earning an income by working in India, you are required to pay tax in India. If you contract is of freelance, then the income earned by you has to be self declared and taxes paid accordingly. There are some expenses one can claim, a CA should be able to guide you.   Not sure why the Swiss comapny is paying taxes?. Are they depositing this with Income Tax, India, do they have a TAN Number. If yes, then you don't need to pay tax. But you need to get a statement from your company showing the tax paid on behalf of you. You can also verify the tax paid on your behalf via ""http://incometaxindia.gov.in/26ASTaxCreditStatement.asp"" you cna register. Alternatively if you have a Bank Account in India with a PAN card on their records, most Banks provide a link to directly see" I am a freelancer based in Europe and I want to tell you: - if you are a freelancer, then you INVOICE your Swizzerland based client The word salary is improper. - So your client will DEDUCE the invoice from its taxes, and NOT pay income tax on top of that invoice. Because invoice = expense.  So, ONLY YOU pay income tax in India. Your client pays no tax at all, not in India, not in Swizzerland. As you are a freelancer and not employee, the company has no obligation to pay employer taxes for you. A company  has financial benefits from working with a freelancer. I have some more inputs to investigate: India has dual tax avoidance treaty signed with european countries so that NRIs dont pay tax in both countries. Please check if India has some agreement with Swiss Also for freelance job that is delivered from India, u need to make sure where you have to pay taxes as you are still in India so the term NRI will not hold good here. Also, if Swiss company is paying tax there, and you are  a freelancer from India(resident in india) how to tax filing /rate etc has to be investigated. Also, can you apply for tax back from swiss( a portion of tax paid can be refunded eg: in Germany) but I dont know if this is true for Freelancers and also for people out side SWISS. Bip
The finance team from your company should be able to advise you. From what I understand you are Indian Citizen for Tax purposes. Any income you receive globally is taxable in India. In this specific case you are still having a Employee relationship with your employer and as such the place of work does not matter. You are still liable to pay tax in India on the salary. If you are out of India for more than 182 days, you can be considered as Non-Resident from tax point of view. However this clause would not be of any benefit to you as are having a Employee / Employer relationship and being paid in India. Edit: This is only about the India portion of taxes. There maybe a UK protion of it as well, plus legally can you work and your type of Visa in UK may have a bearing on the answer From tax perspective, any income you earn for services performed while you're in the US is US-sourced. The location of the person paying you is of no consequence. From immigration law perspective, you cannot work for anyone other than your employer as listed on your I-20. So freelancing would be in violation of your visa, again - location of the customer is of no consequence. "Finally, I got response from finance center:  ""It doesn't matter where do you study, what does matter is where you   live. So, once you live in Germany, you pay taxes in Germany. And   it doesn't matter who you work for."" So, there are two options to pay taxes: it's paid by an employer or an employee: If I would work for Swiss company, I need to show how much money I make every month (or year) to Finance Center." Business Apprentice is internship. That is not what is applicable for you. You're a visiting professor/researcher, which falls under Article 22, so you don't get the standard deduction. "Your comment to James is telling and can help us lead you in the right direction: My work and lifestyle will be the same either way, as I said.   This is all about how it goes ""on the books.""    [emphasis mine] As an independent consultant myself, when I hear something like ""the work will be the same either way"", I think: ""Here thar be dragons!"".  Let me explain: If you go the independent contractor route, then you better act like one.  The IRS (and the CRA, for Canadians) doesn't take lightly to people claiming to be independent contractors when they operate in fact like employees. Since you're not going to be behaving any different whether you are an employee or a contractor, (and assuming you'll be acting more like an employee, i.e. exclusive, etc.), then the IRS may later make a determination that you are in fact an employee, even if you choose to go ""on the books"" as an independent contractor. If that happens, then you may find yourself retroactively denied many tax benefits you'd have claimed; and owe penalties and interest too.  Furthermore, your employer may be liable for additional withholding taxes, benefits, etc. after such a finding. So for those reasons, you should consider being an employee.  You will avoid the potential headache I outlined above, as well as the additional paperwork etc. of being a contractor. If on the other hand you had said you wanted to maintain some flexibility to moonlight with other clients, build your own product on the side, choose what projects you work on (or don't), maybe hire subcontractors, etc. then I'd have supported the independent contractor idea.  But, just on the basis of the tax characteristics only I'd say forget about it. On the financial side, I can tell you that I wouldn't have become a consultant if not for the ability to make more money in gross terms (i.e. before tax and expenses.)  That is: your top line revenues ought to be higher in order to be able to offset many of the additional expenses you'd incur as an independent.  IMHO, the tax benefits alone  wouldn't make up for the difference. One final thing to look at is Form SS-8 mentioned at the IRS link below.  If you're not sure what status to choose, the IRS can actually help you.  But be prepared to wait... and wait...  :-/ Additional Resources:" Chiming with my experience, because I hate generalizations of an entire country.  I'm Indian, born and raised, but came to the US to do my undergrad/uni and now work out of the US. I had a lot of the same qualms about working with my Indian peers, but I've found that it also depends on the support structure that companies offer. High turnover is definitely an issue, but that seems to be because companies focus more on hiring and less on retention (offering signing bonuses but then little to no continued progress, limited growth opportunities, rigid hierarchy, terrible working hours).  I have someone who reports to me in India now and it's an experiment on how to better engage them, and it's worked better. Turns out you can expect more when you also treat them like an American employee while expecting american results. There are definitely still cultural clashes in work ethic etc. but they can be overcome if you get people to stick around long enough.  Of course, this is anecdotal but that's my two cents. As per Wikipedia of right now, here are unemployment figures for Switzerland and surrounding countries: Liechtenstein, unfortunately, does not have a large job market, given its total population of about 37,000 people. And note that the German figure of 4.5% is the lowest it has been for decades - I'd expect this number to go up and the Swiss one to stay constant. Bottom line: you will have an easier time finding a job in Switzerland. (Plus all the other good points the other answers raised: great mountains, great chocolate, low taxes, clean streets etc.) "Nope... as mentioned elsewhere, I hired a lawyer, and my employer absolutely does not own any of my work. I've been extremely careful about that. This is much more common as a developer working for a ""for-profit"" entity particularly in the US. I work for a government body and not in the US." Prior to his current job role, Mr. Raphael Lilla operated as the Director, Group and Business Control at Hinduja Bank. Currently, he is working as an Executive Director of SBC Group AG, Switzerland and as Managing Director of Swiss Bullion Company International LLC, Dubai. "You do not need to inform your employer of your additional activity, but it is your responsibility not to work for more than 48 hours per week as long as you are an employee. So if you are working 38 hours for your employer, you may not work for yourself for more than 10 hours. It is, however, not so easy in practice to draw the line between work and a hobby, as long as you are not being paid by the hour. The main reason to present your employer with an addition to your work contract is to make it legally very clear that he holds no intentions to claim copyright to your work. He may attempt to do something funky like claim your home computer is, in fact, a work computer because you used it once a month to work from home, and your work contract may contain a paragraph that all work performed on a work computer results in copyright ownership for your employer. I have no idea how likely this is in practice, but this is the reason I know is commonly given as legal advice to have a contract. So the normal contract you present your employer with says: In order to earn user contribution money from a website, you need to register as a sole proprietor (Gewerbeanmeldung) and pay trade tax (Gewerbesteuer) and sales tax (Umsatzsteuer, alternatively you claim small trade exception, Kleingewerbe), which also makes a tax return mandatory. I would guess, however, (and this is not legal advice in any way, just my guess), that a couple of contributions towards server cost in a strictly non-profit endeavor is not commercial (""gewerblich"") at all but private, in the same way that you may write an invoice to someone you sold your old bike to, or a kid may get paid to mow someone's lawn. Based on that guess, my non-legal-advice recommendation is to take the contributions and do nothing else, as long as the amount is nowhere near breaking even if you count your work input." "Your own site/business. I’m in freelancing and internet business for 15 years, 20 years IT experience. Currently i use freelance websites for cheap Asian employees, very seldom for EU/USA employees, and if only if local competition is heavily out-pricing qualified staff. Till I went ""limited"" i.e., founded a limited corporation I was jobbing as freelancer and sole proprietor, both with limited success due to the strong Asian competition i myself currently hire. The point where freelancing got ""not sustainable"" as primary income was 2006 for me, don’t want to get into detail but every freelancer who was active back then knows what I mean, it was like whole India got internet. If you have absolutely no references, do it for the references a limited time and see the fee you pay as service for you to get references, then start your own web identity, either as freelancer or as corporation. Make sure you take your very satisfied customers with you. Every ""very satisfied"" customer in your contact list means 10 new customers which mean 2 new customers which mean 0.2 new customers and so on. Honestly, this info is solely based on experience of this niche fro ma European citizen perspective, if you’re based anywhere else the situation might be totally different." "You can file an LLC yourself in most states, although it might be helpful to use a service if you're not sure what to do to ensure it is correct.  I filed my LLC here in Colorado online with the Secretary of State's office, which provided the fill-in-the-blank forms and made it easy. In the U.S., taxation of an LLC is ""pass-through"", meaning the LLC itself does not have any tax liability.  Taxes are based on what you take out of the LLC as distributions to yourself, so you pay personal income tax on that. There are many good books on how to form and then operate an LLC, and I personally like NoLo (link to their web site) because they cater to novices. As for hiring people in India, I can't speak to that, so hopefully someone else can answer that specific topic. As for what you need to know about how to run it, I'll refer back to the NoLo books and web site." "This doesn't answer your question, but as an aside, it's important to understand that your second and third bullet points are completely incorrect; while it used to be true that Swiss bank accounts often came with ""guarantees"" of neutrality and privacy, in recent years even the Swiss banks have been caving to political pressure from many sides (especially US/Obama), with regards to the most extreme cases of criminals. That is to say, if you're a terrorist or a child molester or in possession of Nazi warcrime assets, Swiss banks won't provide the protection you're interested in. You might say ""But I'm not a terrorist or a pervert or profiteering of war crimes!"" but if you're trying so hard to hide your personal assets, it's worth wondering how much longer until Swiss banks make further concessions to start providing information on PEOPLE_DOING_WHAT_YOU_ARE_DOING. Not to discourage you, this is just food for thought. The ""bulletproof"" protection these accounts used to provide has been compromised. I work with online advertising companies, and a number of people I know in the industry get sued on a regular basis for copyright or trademark infringement or spamming; most of these people still trust Swiss bank accounts, because it's still the best protection available for their assets, and because Swiss banks haven't given up details on someone for spamming... yet." Tax is due in India as you offered services from India.  So whether the International Client pays via Credit Card, Bank Transfer, Paypal or any other means is not relevant. Even if the International Client pays you in a account outside India; it is still taxable in India. "I'll chime in here with the ""don't do it crowd."" I think it's fraught with ugly possibilities. However, you may, for various reasons, decide to say, ""to hell with it, we'll make it work."" If that is the case, treat it like a business transaction and not an emotional transaction. Work up a binding contract with your attorney for how the two of you will handle issues such as: Of absolutely critical importance is the bail-out clause: how will you handle it when one person says, ""Sayonara.""  None of this ensures a smooth road - god knows I wouldn't do it - but it could help protect your sanity and some of your investment down the road. Good luck."