Hourly work for a company abroad

Hourly work for a company abroad

Question:
Hello!
I am interested in posting hourly work to a company in Ireland. What would be the best options - FL for VAT or setting up a company. The work will be about 10 - 20 hours a week, and I will be secured at another place on an employment contract.
Thanks in advance!

Answer:
Hello,
You have two options - registration of a company through which to carry out your activity or registration as a self-employed person. Both options have their pros and cons
- in the case of self-employment, you declare the amount of income for the year. From the amount received, you deduct 25% of legally recognized expenses and the insurances paid during the year, and you owe 10% tax on the amount received.
- with an EOOD, you declare the amount of income and expenses related to your activity. If the income is more than the expenses, then you make a profit and it is taxed at 10%.
- if you are self-employed, you must declare and pay insurance every month, with the minimum insurance income currently being BGN 933.00, which means minimum insurance in the amount of about BGN 300.00 per month. At the end of the year, when submitting the annual tax return, an adjustment is made, looking at the realized income during the year, and if its amount exceeds the amount on which you were insured, insurance must be brought on the difference. The amount on which insurance is paid on an annual basis cannot be higher than BGN 45,000.00 for the year 2024.
- with EOOD, the insurance contributions are again paid on the minimum insurance income for the year - BGN 933.00, the difference being that there is no annual equalization of the insurance contributions.

The fact that you are insured under an employment contract does not exempt you from the obligation to provide insurance when working through either of the two options. An exception is if you are insured at the maximum insurable income - then you will not owe additional insurance through a company/SP or if you are insured at an amount close to the maximum insurable income, then you will owe insurance on the difference between the maximum insurable income and the amount on which you are insured of the employment contract.
 
You are the person who needs to assess and make some kind of plan regarding the income and expenses you would have. This is the only way you can determine which form of activity is economically more profitable (ie you would pay less tax and insurance).
 
In addition to the mentioned differences, there are also several purely functional ones:
- the money you earn as a freelancer is really your money and you can "spend" it whenever and on whatever you want. With an EOOD, the money the company earns stays with the company. If you, as the owner, want to have this money at your disposal, there are several options - to give yourself a salary, to give yourself a loan, or after the financial year is over and the company, if it has made a profit, to distribute the profit as a dividend (such as you will have to pay an additional 5% dividend tax on this amount).
- if you exercise your activity as a freelancer, you will not have the obligation to issue a receipt when receiving cash. This restriction does not apply to EOOD.
- in order to register as a self-employed person, you must submit a diploma or some other certificate with the set of documents (application and declaration) certifying your competence to provide the services you will perform. The registration itself takes place in the Bulstat Register within 24 hours, and there is also a state fee of BGN 10.00. To register an EOOD, the procedure is a little longer and more complicated. A set of documents is being prepared (foundational act, minutes of the founding meeting, management contract, several declarations and a sample signature). Some of the documents are notarized. After that, you need to find a fundraising account in a bank of your choice, to which you can deposit the initial capital. The minimum is BGN 2.00. The import note for the paid-in capital, together with the other prepared documents, must be submitted to the Commercial Register no later than 7 calendar days from the date of the founding act, and the registration takes place within 7 working days. The state fee is BGN 110.00. The notary fee is BGN 8.00, and the bank fee depends on the bank you choose.

When providing services to a company from an EU Member State (such as Ireland), VAT registration is mandatory for both types of work. The registration regime is different from the normal VAT registration regime - you will not owe VAT on the amount of services provided to such companies, but you have the obligation to declare your sales monthly.
We hope we have been helpful!
Greetings!