Should a bilateral tax law between the US and another country protect remote workers? Assume someone is a citizen of the United States, and a resident of another country (if a specific example is necessary, Turkey). They live in the foreign country and work remotely for a company in the US. Their income is taxed the normal way by the US government (the Foreign Earned Income Tax Exclusion may apply). Would the foreign government get the short end of the deal in this situation, because the income has already been taxed by the US? Or would it be necessary to file their taxes in some more complicated way so that both governments get a piece of the pie?
That will depend on the specific provisions of Turkish law (in the example case) and the provisions of the tax treaty between Turkey and the US. The Turkish resident will probably have to file with Turkey. To what extent s/he will get credit for taxes paid to the US, and indeed to what extent income from a US company is taxable under Turkish law will depend on the specifics of Turkish law and of any treaty, and may well be different in a different country.
I'd rather not, but this might be compliant if you make sure that the personal data under your responsibility remains secure and protected even if it is processed abroad. Since the UK has left the EU, it is sometimes necessary to distinguish between implications of the EU GDPR and the UK GDPR. These are functionally equivalent, but in the matter of international data transfers the practical details have diverged. In my answer that you cited, I argued that any website processes personal data, and is thus potentially in-scope for the GDPR. If you cause another organization to process this personal data outside of the UK, you are performing an international data transfer (called “restricted transfer” in UK guidance). For example, such non-UK processing occurs if you use cloud services that run outside of the UK. The UK ICO has guidance on international data transfers. As in an EU GDPR context, you can only perform the transfer if the data remains suitably protected, or one of the exceptions applies. The data remains suitably protected if the target country was attested and “adequate” level of data protection, or if you have implemented appropriate safeguards. As of 2022, the list of countries considered adequate is generally equivalent to the EU list of adequacy decisions. Notably, the US is no longer on that list after the Schrems II decision that invalidated the Privacy Shield Agreement. Since this decision was made before Exit Day, it also applies in the UK. This leaves “appropriate safeguards” for UK→US restricted transfers. In the linked ICO page, read the section Is the restricted transfer covered by appropriate safeguards?. In brief, you will need to perform a Transfer Impact Assessment, and sign Standard Contractual Clauses with the US data importer. In a Transfer Impact Assessment (TIA), you check that the data remains protected despite the transfer into a country without an adequate level of data protection. There is no official guidance on conducting a TIA, but the IAPP has a template and the EU EDPB has recommendations on supplemental measures to protect data transfers, which might reduce the risk and affect a TIA in your favor. It's worth noting that the EDPB recommendations were written in the wake of the Schrems II ruling, and can be summarized as “compliance is impossible when using US-based cloud services”. But this is your assessment, and TBH it seems the UK is a bit more relaxed than the EU in this regard. The Standard Contractual Clauses (SCCs) are a pre-formulated contract that binds the foreign data importer to handle the data properly. In essence, this translates relevant aspects of the UK GDPR into contract law. Many service providers already provide a Data Processing Agreement that includes SCCs by reference, but you'll have to make sure that these contracts have been entered in a legally binding manner. Sometimes these apply automatically as part of the terms of service, sometimes you need to explicitly sign these documents. But SCCs are one detail where UK GDPR compliance and EU GDPR compliance diverges a bit. The old EU SCC templates from 2004/2010 can no longer be used and have been replaced. For compliance with the EU GDPR, the new 2021 SCCs must be used. For compliance with the UK GDPR, you have two options. You can either use the 2022 International Data Transfer Agreement (IDTA), or you can use the 2021 EU SCCs along with the 2022 UK International Data Transfer Addendum which modifies the EU SCCs in some details. Don't want to deal with TIAs and SCCs? Switch to a hosting provider that only processes the personal data under your control in the UK, or in a country with an adequacy decision (e.g. EU, Canada, Israel).
You can always get in trouble. Copyright is always protected by the laws of a particular nation, by the courts of that nation. Because of the Berne Convention and the Universal Copyright Convention, I can sue you outside of my country, and will be treated as a person of that country. The conventions don't say who has jurisdiction, that is where you have to sue, so you have to resort to conventional jurisdictional principles. If you are in Europe, under the Brussels Convention, that means I have to sue you in your country of domicile (if you reside in multiple European nations, I get to decide which country to sue you in). The English courts are slightly different in that they generally hold that you sue in the country where the act took place, but (Lucasfilm v Ainsworth) you can sue in UK courts for infringement that occurs in the US. As you can see, this can get complicated. I can't sue you in Mongolian courts (assuming neither of us has any connection at all to Mongolia), but I could sue you (being a hypothetical UK citizen) in UK courts if you did the infringing deed while in Mongolia. Mongolian courts enforce Mongolian copyright law, US courts enforce US copyright law. Therefore you first have to decide what country you plan to sue in (from the plaintiff's perspective).
In short, because the government is not required to honor your characterization of the transaction. A gift is something given without receiving anything in exchange. In almost all taxable contexts this is not a plausible argument. A judge would almost surely rule for the government that your money transfer was rent and not a gift, for example. And, if you didn't report the income that was found to be rent and not a gift, on an income tax form, you would be assessed serious penalties and might even be charged with criminal tax evasion, since the sincerity of your gift would be in doubt. Also, while in the bare example of an informal roommate arrangement, proof of the existence of a lease in the event of a dispute between the parties might not be necessary, usually contractual documents are in place to protect the rights of both parties to a transaction and those would be inconsistent with a gift characterization. For example, if you sell lumber on credit and it was treated as a gift, you couldn't sue someone who failed to pay for their lumber, and if you sold lumber for cash, it would be a clear quid-pro-quo.
will these assets be considered as income by the IRS, even though the account money predates her becoming a US person? No. Even if there was no income, is it possible that the person still had to pay other taxes related to foreign assets (i.e. does the IRS tax assets, not only income? There are fines related to failure to disclose foreign bank accounts which are quite draconian. The fines are high out of concerns about money laundering and terrorism funding, without a legislative, IRS or judicial recognition that these issues can arise in far less nefarious circumstances. But the fines are not truly taxes. They are fines for failure to file an information tax return or make a disclosure that is required by statute. If the disclosure had been made in a timely manner, there would have been no actual tax due and it is not illegal to have the accounts, so long as they are disclosed. Resolving an irregularity of this kind is quite tricky, can go very badly if done incorrectly (e.g. hundreds of thousands of dollars of civil tax fines or worse and possible impairment of immigration status), and calls for specialist international tax administration counsel. I've encountered a case like this in my own practice and referred it out to specialist counsel rather than handling myself, even though I regularly handle less demanding international tax questions in my practice. This is a &quot;brain surgery&quot;/&quot;rocket science&quot; class difficulty problem as far as lawyer expertise requirements are concerned.
Unfortunately, you are probably not entitled to the redundancy / severance money since you weren't technically ever made redundant / laid off - there was no point in time where you were willing and able to work where they refused you, and I presume you were paid for all time worked. If you're concerned that they only changed their tune because they knew you had a better job already lined up - well, you can call their bluff or just use it as a learning experience. In what jurisdiction do you work? If the US, you could call their bluff, say you'd rather stay and see what they do. You would then keep the option of simply walking away with your stuff in a box any time you felt like it (assuming at-will employment and no contracts that state otherwise).
Both the Due Process Clause and the Dormant Commerce Clause impose meaningful limits on states' ability to tax income on residents. The Due Process Clause requires &quot;minimum contacts&quot; between the state and the taxpayer. Under the Due Process Clause, states may only tax a nonresident's income when there is a &quot;some definite link, some minimum connection, between a state and the person, property or transaction it seeks to tax.” North Carolina Dept. of Revenue v. Kimberley Rice Kaestner 1992 Family Trust, 139 S. Ct. 2213, 2220 (2019). Despite the word &quot;minimum,&quot; there isn't any fixed threshold at which contacts become sufficient to permit a state to impose a tax. Instead, the courts will ask whether the state's assertion of jurisdiction to tax the person offends &quot;traditional notions of fair play and substantial justice.&quot; A critical question in this analysis will be whether the taxpayer enjoyed the &quot;benefits and protection&quot; of the state in connection with the subject of the tax. In your examples, then, you can probably guess how the courts would view each transaction. If you are a Connecticut resident but perform a $5,000 job in New York, you have physically entered New York, likely conducted business with another New York entity, and you can go to the New York courts if the other party breaches the contract by which you earned the money. You have meaningful contacts with the state and enjoy the protection of its laws, so the state is permitted to impose a tax on the income from that transaction. But if you drive from New York to California, your presence in each state is likely highly transient. You pay tolls for using the highways and sales taxes for lunch or something, but you aren't generating any income from those transactions. Your presence in New Jersey would not, for instance, entitle you to go into New Jersey courts to sue for a breach of your New York contract. New Jersey has no meaningful connection to that income, so it may not tax it. But contrast that with your lunch purchase, which creates sufficient connections to New Jersey to permit it to tax that transaction: you are physically in New Jersey, you are protected by New Jersey's food-safety laws, and you can go into New Jersey courts if Burger King intentionally poisons you. So the state can impose a sales tax on that transaction, but not income tax on out-of-state transactions. The Dormant Commerce Clause prohibits states from imposing the &quot;unfair burden&quot; of double taxation on interstate commerce. The Dormant Commerce Clause prohibits the states from regulating, restricting, or substantially burdening interstate commerce without the consent of Congress. The U.S. Supreme Court has made clear time and time again that income taxes violate the Dormant Commerce Clause when they create a risk of double taxation that doesn't exist for taxpayers with no out-of-state business: Adams Mfg. Co. v. Storen, 304 U.S. 307, 311 (1938) (“Interstate commerce would thus be subjected to the risk of a double tax burden to which intrastate commerce is not exposed, and which the commerce clause forbids.”) Gwin, White &amp; Prince, Inc. v. Henneford, 305 U.S. 434, 440 (1939) (“Such a multiplication of state taxes, each measured by the volume of the commerce, would reestablish the barriers to interstate trade which it was the object of the commerce clause to remove.”) Comptroller of the Treasury of Maryland, 135 S. Ct. 1787, 1801-2 (2015) (“The tax schemes held to be unconstitutional ... had the potential to result in the discriminatory double taxation of income earned out of state and created a powerful incentive to engage in intrastate rather than interstate economic activity.”) So even though New York and Connecticut have sufficient contacts from a due-process perspective to permit both of them to tax your business, they many not tax all of your income if not all of it if another state has a claim to it as well. This has of course led to debates over exactly how much of your income New York and Connecticut is entitled to, and the question only gets more complex for businesses with larger footprints. Amazon, for instance, is doing business in every state and territory, so how do we divide its income among the 50+ entities looking to take a bite of those hundreds of billions of dollars in income? For quite a long time, most states used a three-factor calculation that apportioned income among the states based on how much of they taxpayer's property, payroll, and sales were in each state. Oversimplified, this means that if you had 5 percent of your property in New York, 40 percent of your payroll in New York, and 15 percent of your sales in New York, that would average out to 20 percent, so you would pay New York taxes on 20 percent of your income. Over time, the three-factor apportionment method has fallen out of favor, and many states adopted other methods -- especially calculations that more heavily weight the sales factor -- to encourage economic development. Because most large companies have only a small portion of their sales in almost any given state, they can substantially reduce their tax bills by setting up their headquarters in a state that is going to ignore the value of their real estate, equipment, and payroll when calculating their tax bills. tl;dr: Under the Due Process Clause, a state can't impose tax on anything it doesn't have some meaningful connection to. Under the Dormant Commerce Clause, the states have to find a way to make split up taxes that they might share a claim to.
I found a mention of this issue here, where the case Rhonda Eddy v. Ingenesis was cited. Eddy worked from home in West Virginia, but had signed her contract with a company headquartered in Texas. The link is the decision of The State of West Virginia Supreme Court of Appeals, which upheld the decision of the Circuit Court of Jefferson County, namely, that the Circuit Court did not have the authority to hear Eddy's petition against her employer because she was out of the Circuit Court's jurisdiction. The circuit court found that it did not have personal jurisdiction over respondent under West Virginia’s personal jurisdiction statutes, and that respondent did not have sufficient minimum contacts with West Virginia to satisfy federal due process considerations. The circuit court also found that it did not have subject matter jurisdiction over petitioner’s WPCA claim because petitioner’s employment contract contained a valid choice of law clause that mandated Texas law would govern any dispute between the parties. Emphasis mine. It all depends on stipulations made in the employment contract. This (in the United Kingdom) states 4. Place of Work Allows the employer to specify the location where the employee will work. However, it also allows for the employer to specify any other location in the future. This gives the employer much greater flexibility. That would seem to indicate that (at least in the U.K.) the place is specified in the contract.