Tax on income

From YWAMKnowledgeBase
Jump to: navigation, search

Generally most Countries tax the income of those who are deemed to be "Resident". As YWAMers living abroad as missionaries are "resident" (that is living overseas permanently or for a greater part of a year) our income can often be considered taxable. In some particular cases we can have to pay tax in both our country of origin and country of residence!

Being a missionary does not mean we get a free ride!

All YWAMers should talk to their local tax officer before leaving to go overseas for an extended period.

Example Tax Situations

You may be taxed as a YWAMer

  • On some or all of your income in your country of residence.
    • In some situations you could see yourself as a small "missionary" agency" in which case you would be taxed on your "profits" or "drawings" on your business. You would have income and expenses and the balance might be taxable at some level.
  • On some or all of your income in your country of origin.
  • On some or all of your income in BOTH your country of residence AND your country of origin. (Yes, this can happen in countries where there is no bi-lateral tax agreement!)
  • On houses or property in your country of origin if you derive an income from them.

You may have to

  • submit one or two tax returns each year
  • never pay tax if your income is below the tax paying threshold.
  • pay a local form of tax to the local government. This is often based on your income (or lack of it)

NOTE: Within the EU there is freedom of movement for EU citizens who are moving from country to country to seek employment. There are very good treaties that ensure that Taxes, Health Insurances and pensions are equal throughout the EU. There are strong bi-lateral tax agreements to ensure citizens don't have to pay double tax. However, as YWAMers are often classed as missionaries and not "employees" or "self-employed" we often only have the rights of residence. Although there is little difference here it can mean that you need to pay into a State pension in one country whilst living in another or similar minor problems. YWAMers may also not receive the same family tax-support/allowances in these countries as they are only for "employees"

Remember

We are taxed a lot in our countries... VAT (sales tax), Tax on fuels, tax on luxury goods, tax on houses, tax on importing and exporting, tax on inheritance. It is best to always pay tax when we are due to pay it. But we needn't pay more than what is legally required!