How can an Umbrella Company Help with Contracting in Burundi?
Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. There are companies who specialise in helping workers make the most out of their contracts.
They’re called Umbrella Companies (or, contractor management companies).
Basically, an Umbrella Company acts as your full-time employer, even though you maintain your independence as a contractor. They collect and filter payments from your clients, filtering out the necessary social security and fees. You send them your timesheets, and they send you payments.
Because they act as your “employer,’ they can sponsor you and provide a single work permit for multiple contracts in Burundi. Even better, most are experts in Burundi and expat tax law, meaning they’ll also help you optimise your earnings in Burundi.
Although the Umbrella Company is technically your “employer,” you’re essentially freeing yourself to work even more independently. You still dictate your contracts, your hours, your schedule. The Umbrella Company simply filters out the time-consuming admin and immigration issues, allowing you to focus on your new contract.
Can I Organise My Taxes and Work Permit Myself?
Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for Burundi.
If you’re working independently, it can be difficult to find clients willing to sponsor you. Moreover, even if your client can do this, you’ll need a new sponsor each time you decide to take on a new contract. Of course, every new sponsor will mean more paperwork.
Also, are you familiar with the intricacies of the tax system in Burundi, as well as your own country’s laws on overseas earnings? If so, good on you!
However, if you’re like the rest of us, figuring out (much less reducing) your tax liability in Burundi and your home country can seem like full-time work in itself.
A Contractor’s Guide to Taxes in Burundi
One of the most consistently challenging aspects of contracting in Burundi is complying with the country’s tax system. As well as paying tax in Burundi, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.
How do I calculate my taxable income in Burundi
If you’re working in Burundi under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Burundi for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Burundi, but contractors may not be offered this service because of their short stay with each employer.
Anybody who can’t pay their tax in Burundi through PAYE is left with the prospect doing everything themselves.
Do you know much about Burundian Tax Law? Does Burundi have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Burundi can range from 20 to 30 percent, and you need to be sure you are placed in the correct tax brackets.
Tax Filing as a Contractor in Burundi
How to File Taxes in Burundi as a Contractor
Individuals are not required to file taxes on employment income. Employers must withhold taxes under the PAYE system, and remit payments to the tax authorities within 15 days following the end of the month for which the tax was due.
Tax Figures in Burundi
|Currency||Burundian Franc (BIF)|
|Tax-free Threshold in Burundi||BIF1.8 million|
|Income Tax Rates||
Deductions are allowed for:
(i) Employee contributions to the state pension;
(ii) Contributions to a qualified pension fund or complementary social security contributions (capped at 20% of gross income);
(iii) Fringe benefits relating to transportation expenses (capped at 15% of the basic salary); and
(iv) Rental or compensatory allowances (unless they exceed 60% of the basic salary, in which case the excess is treated as taxable income).
Tax Residency in Burundi
When do you become a tax resident in Burundi
You become a tax resident in Burundi when:
- You are a Burundian national;
- Your permanent abode is in Burundi; or
- You spend 183 days or more in Burundi during the tax year.
Does the 183 day rule apply in Burundi
Am I taxed on my global income in Burundi
Residents are taxed on their global income. Non-residents are taxed on their Burundi-source income only.
Can you set up your own Limited Company in Burundi?
|How long does it take to set up||4 days|
|How much does it cost||BIF151,000 + BIF800 for each additional page of the articles of association|
|Is it easy?||Starting a business in Burundi is relatively straightforward. Burundi has a ‘Starting a Business Rank’ of 42 out of 190 countries (Source: The World Bank).|
Tax Calculator in Burundi
If you are a contractor and want a calculation on your tax and net retention in Burundi, we can supply it to you free of charge.
Using an Umbrella Company for Income Tax in Burundi
Contractors in Burundi are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Burundian umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).
The companies are experts in Burundian taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Burundian tax office or tax department directly including processing your tax refund if you are eligible.
How We Can Help You with Tax in Burundi
We work with numerous umbrella companies in Burundi, many of whom are experts in tax and immigration laws. If you have any questions about tax in Burundi, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Burundian work permit.
Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Burundi but without the overhead of directly dealing with the Burundian tax authorities. Get in touch with us today for some reliable advice on tax in Burundi!
A Contractor’s Guide to Work Permits in Burundi
Immigration is one of the primary concerns for any contractor hoping to start working in Burundi. Permanent employees will find it easy to get their Burundian work permit because they’ll receive “sponsorship” for their entire stay from their prospective employer.
The Burundian work permit, known more commonly as the Burundian work visa, is dependent on this sponsorship because it confirms that you’ll be earning money during your stay in the country. Contracting in Burundi is more difficult because the work permit is tied to one employer, so you have to change it to suit each new contract. Thankfully, umbrella companies provide a convenient and effective solution to this issue.
How Does an Umbrella Company Work?
Most people want to do their work, earn their money and enjoy their spare time without taking on loads of admin in a new country. That is why an umbrella company can help.
When you’re working through an Umbrella Company, you’ll essentially be outsourcing the admin and tax issues to specialists.
While the umbrella company will charge a fee, you’ll likely end up saving more money in the long run: you’ll be able to focus on your work, expertly reduce your tax liability, and comply with all laws and regulations in Burundi (which means avoiding fees, fines, or even worse penalties).
How Can We Help You?
There’s a huge variety of Umbrella Companies with different specialities and advantages in Burundi. How do you find the right one for your circumstances?
We work closely with Umbrella Companies all throughout Burundi and match contractors with the right company for them. If you’ve already secured a contract in Burundi, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).