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Taxation and Compliance
Understanding Key Tax Forms: 1099-NEC for Contract Workers
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Vladana Donevski
Writer and payroll expert
International Employment Laws
Published on:
May 22, 2024
Written by:
Lucas Botzen
Explore the critical topic of false self-employment in our latest blog post. Discover the fine line between being a self-employed individual and an employee, and understand the criteria tax authorities use to define this relationship. Learn about the risks for both the self-employed and the companies hiring them, including potential financial penalties and loss of tax benefits. This post is essential reading for anyone navigating the complexities of modern employment across borders, ensuring compliance, and avoiding legal pitfalls. Stay informed to protect yourself and your business as regulations evolve.
Table of contents
It is common for companies to hire self-employed people, mainly employees from countries other than where the company is based, as this is an easier way to sign a work agreement (read more about this here). However, as a self-employed person and as a company, you risk that this working relationship is very similar to an employment contract. In this case, this is called false self- employment.
employed:**
risks as a self-employed person:
**
Losing the tax benefits such as self-employed persons' allowance, SME profit exemption, and, if applicable, starter's allowance.
The topic of false self-employment is increasingly in the picture. It will come back a lot more in the future, with stricter regulations and more checks. As a company, ensure that you stay out of the picture and certainly put remote employees on the payroll via a payroll service or GEO service.
Taxation and Compliance
Vladana Donevski
Writer and payroll expert
Global Workforce Management
Lucas Botzen
Founder
Global Employment Guides
Lucas Botzen
Founder
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