As a contractor, you’re probably interested in legally maximising your net earnings. Better yet, you might even work out how to work tax free in Liberia.
Unless you’re already an expert in the tax system of Liberia and have lots of free time to pore over your return, you should consider seeking specialist tax advice. Otherwise, you risk paying too much, or mistakenly violating tax law in more than one country.
Offshore payments for contractors in Liberia
Many freelance workers opt to be paid in offshore accounts. Regardless of where you’re paid, you still need to pay your appropriate social security and taxes. However, these accounts often afford more flexibility and privacy than local accounts. Many offshore establishments are also experienced in working with international clients.
Your contract, your work, and the tax law of your home country can all influence whether or not offshore payments are the best option for you.
To sort this out, your simplest option is working through an Umbrella Company that specialises in offshore payments. Not only can they help you determine whether you’re eligible to work tax-free, they can get you set up with an offshore account.
This combines the benefits of a standard Umbrella Company with a deep understanding of international tax:
- Local payroll if required
- Low management fees
- Minimal administration requirements for the contractor
- Fast payment processing
- All necessary insurances and registrations (e.g. Professional Indemnity and Public Liability Insurance)
What about tax liability in your country of residency?
Even if you don’t owe any taxes in Liberia, there’s a fair chance you’ll still have to pay something to your country of tax residency.
Figuring out your tax liability isn’t easy, though. The tax systems of both Liberia and your home country will affect how much you owe (if anything).
We strongly recommend consulting a tax expert who can help you determine:
- if you can take advantage of a dual taxation agreement between the two countries
- if you can offset earnings against expenses
- if you can use pension contributions as a tax efficient means of reducing your tax liability
- if you’re better off working through a local Umbrella Company, setting up your own Limited Company, working PAYE, or Self Employed.
- whether a trust scheme helps reduce your tax liabilities.
- how you can legally approach working tax free in Liberia.
Get in touch with us if you’d like to know more about minimizing your taxes in Liberia.