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Local Taxes v Tax Free Status

Last activity 22 February 2011 by Yud

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gallkate

I have two job offers in Libya, 1st is tax free, the 2nd is subject to local taxes. I do not know why different companies have different arrangements with the Libyan authorities.

My preferred post is the 2nd, which I'm told is liable to 17.7% local taxes. I'm leaving the UK tax system to work in Libya. I know there is an arrangement between UK and Libya for tax but can anyone advise if I would be entitled to tax free status or why the 2 posts would have directly opposite tax liability status.

Employer number 2 is adamant that I will have tax deducted.

bluejay

Some companies will pay the taxes for you and that is why they say it is tax free for you.  The employer of your second offer is not interested in doing that and is letting you know up front that it will be your responsibility to pay it.  When you review your offers remember to also consider if they are offering housing, tickets home, education for children etc...  It all adds up.  Good luck in your decision!

Sandman6

Your tax liability in the UK is dependent upon the number of days you have spent there, both in the current fiscal year and also over the previous 4 years.

Far better (IMO) to work for an employer who recognizes a reciprocal tax agreement with the the UK and handles local taxation on your behalf. Otherwise you could find yourself in a position where you are liable for both Libyan AND UK tax. Pooh.

gallkate

thanks to all

officeboy

1             Any Briton working in Libya can still attain Non Residence Status by basically working for a lengthy enough period (one encompassing a complete UK income tax year), carry out no duties of the employment in the UK and spending less than 90 days a year on average in the UK over the claim period.  This is of course only a very brief description of the criteria and anyone considering such a claim would be best to take professional advice.

2             Any one who cannot qualify to be regarded as Not Resident and Not Ordinarily Resident (NR/NOR) and is thus still liable to UK income tax will be able to claim tax relief, £ for £ in respect of any taxes paid by them or for them in Libya which will correspondingly reduce UK tax liabilities.

3             It does not matter from where an individual is paid or for whom they work.

4             Basically any Briton who still resides in the UK and works in Libya will remain fully liable to UK income tax and it is then up to the individual to declare their gross foreign earnings and to claim any tax relief due in respect of Libyan taxes paid.  Visa’s/Residence in Libya is irrelevant when assessing UK income tax as the number of days spent in the UK by the individual is the main factor.

gallkate

that's a very comprehensive response....many thanks

gallkate

HOW IS EVERYONE...SINCE MY INTENDED DEPARTURE FOR A NEW JOB IN LIBYA AND ALL YOUR HELPFUL HINTS...ALL HELL HAS BROKE LOOSE

Yud

Hello gallkate,

Yep, according France 2 news last night, all foreign companies are calling their staffs to their homeland.

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