1

Remote working in another country (Vietnam) and IR35

Hi We have an employee who has resigned to go and work in Vietnam as a teacher. They have offered to still work for us on a freelance basis as and when. They have a useful skill set. However if we terminate them as an employee and bring them back on a self employed consultancy basis what are the implications? Trying to find out the work but think IR35 would still apply as they are still a UK resident? Also we need to be clear on employment status as if they are working from another country would we need to consider if the employment laws from that country need to apply? Any help appreciated

990 views
  • Hi Kerry,

    First, you need to make sure that the arrangement is actually a freelancer arrangement. In Vietnam, if two parties work together and their agreement is like an employment arrangement in terms of control and direction, pay, job duties, and management, it will be seen as an employment contract even if it's called something else. This is similar to the UK contractor test and the IRS 20 factor test used in the US.

    If you determine that the arrangement is a true freelancer arrangement, then employment laws won't apply and there's nothing to worry about.

    However, misclassifying a worker in Vietnam can have serious consequences. If it is deemed they should be an employee, the employer could face fines and even up to three years in prison for violating Vietnamese employment laws. Additionally, there may be further penalties for not having a permanent establishment in Vietnam to employ the individual.

    It's best for the individual to get advice from a tax specialist who can look at their specific situation and give tailored advice.