Off topic: Taxes for free-lancer translators between countries
Thread poster: MariusV

MariusV  Identity Verified
Lithuania
Local time: 19:37
English to Lithuanian
+ ...
May 2, 2012

Dear colleagues,

For my own curiosity, I am doing a small simple research about taxes for free-lancer translators in different countries.

I would be very interested if you could share some basic information on:

1. profit/revenue/income tax you have to pay to your government;
2. other taxes and duties, like taxes for social security, health care, etc. (if any);
3. VAT threshold in your country (i.e. when a free-lancer translator must register for VAT);
4. any limitations, restrictions, and similar things (if any) applied to self-employed working as free-lancer translators;
5. the average net that remains for one "after all taxes" in percentage (say you earn 100% before taxes, and after taxes, and etc. it remains ~ 70%).


 

Tim Drayton  Identity Verified
Cyprus
Local time: 19:37
Turkish to English
+ ...
Cyprus May 2, 2012

The answers applicable to the Republic of Cyprus:

1- Income tax (applicable to the self-employed as opposed to companies) is relatively low: the current rates are:
Taxable income (euro) Tax Rate

0 - 19,500 nil
19,501 - 28,000 20%
28,001 - 36,300 25%
36,301 - 60,000 30%
60,001 and over 35%

Temporary tax is payable in the middle of the year based on one's expected earnings for the current tax year (which is the calendar year).

In addition to having a low tax regime, another advantage is that the annual self-declaration form, available in Greek or English and which may be returned in English, is an extremely simple four-page document on which, in my case, there is little more to enter apart from my turnover, expenses and allowable deductions.

2- It is manadatory for self-employed persons to join the state social insurance scheme, and benefits such as health care, pensions and welfare payments are a lot less generous than in most western European countries (which is fair enough - low tax = low benefits). The amount of contributions payable is set as a lump sum based on the area of business that one is registered as working in; for translators the payment is curretly set at EUR 615.79 per quarter.

Payments made into the social insurance scheme are income taz deductable.

3- The VAT threshold is low at EUR 15,600. The rate of VAT was recently raised friom 15% to 17%.

4- Cyprus is a very business friendly, low regulation place and freelance translators are, in my experience, free to get on with their business without falling foul of any petty rules and restrictions. I have found the staff at government offices to be very efficient and friendly in handling my inquiries (and in English at that!).

5- My own turnover has been badly affected by the crisis for the last couple of years and has remained below the income tax threshold meaning that I have paid zero income tax, and I regard the social insurance payments that I make as a kind of stealth tax, given that I am unlikely at may age to derive much benefit from this fund even in terms of an old age pension. This state of affairs seems satisfactory to me as, overall, I do not pay an excessive amount of my earnings to the government.
Some people allege that the high cost of electricity, which is supplied by a state monopoly enterprise, is a further kind of stealth tax.
This may be true, but I feel that Cyprus is a business friendly, low tax kind of place where the state, as a result, is not expected to provide the sort of support that is usual in westen Europe.
On the negative side, the cost of living on the island has skyrocketed, arguably due to EU accession and adoption of the euro, and it is not the crime-free place that it was a few years ago.

I hope that the above information helps.


 

Tim Drayton  Identity Verified
Cyprus
Local time: 19:37
Turkish to English
+ ...
Lithuania? May 2, 2012

Dear MariusV.
I would find it useful to know the comparative situation in Lithuania (and also other EU countries, if colleagues would be willing to share).


 


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