If you’re a UK tax resident it might not be surprising if you were looking for a way out of a chilly, dark British winter. If you’re considering where your next contract could take you, it’s worth considering the findings outlined in The Economist Intelligence (EIU) Global Liveability Index 2022 Report.

But which cities make the cut, and what do you need to know to remain compliant when working there? 6CATS International, our international contracting arm, explains.

Vienna, the Austrian capital, takes the top position in the Index rankings, as it did in both 2018 and 2019, while perhaps unsurprisingly the likes of Kiev, Moscow and St Petersburg have dropped off the list entirely. There have been 33 new cities added, many of which are rapidly growing business destinations in Eastern Asia, which could present a challenge for UK-based contractors who may be unfamiliar with the domestic tax situation and compliance requirements.

Contracting in Denmark

Second to Vienna was Copenhagen, the only Scandinavian city in the top five, which may come as a surprise to those who regularly see these countries top other wellbeing and positivity indexes. Denmark is regularly listed as one of the leading places to work as a contractor and also made our list of the happiest countries earlier this year. However, anyone operating here should be aware that when making a move to Denmark for work there are a number of considerations. Firstly, you will need to notify local municipalities within five days of securing a fixed address. You will also need to register for your Civil Personal Registration (CPR) number and to get that you will need to prove that your stay will last longer than three months, have a fixed address and be able to demonstrate that you are legally entitled to stay.

Zurich is next up in the EIU Index with again near-perfect scores in almost all categories, although it and Switzerland as a whole, offers a particularly strong healthcare system to both permanent residents and contractors alike.

Tax requirements in Germany

Another highly liveable city, according to the Index, is Frankfurt. Like working overseas in any city, there are tax implications and laws to be aware of, and with the German authorities going to lengths to halt anyone suspected of tax evasion, it’s not worth taking the risk. German contract tax law is – perhaps unsurprisingly – fairly complex, and while some pathways can lead to contractors paying very low levels (and in some cases, none) of the equivalent of social security and national insurance contributions, it can be challenging to secure this status with both the tax authorities and the social security services.  On top of that, since 2009 it has been a requirement that everyone living in Germany – even temporarily – has what is considered as ‘adequate medical cover’. There are a number of ways to tackle this issue, however, the process can be complicated so it’s recommended to work with an organisation like 6CATS that can provide worldwide medical cover.

Remaining compliant with tax law when working overseas

Remaining compliant with differing international regulations as a contractor can be tough. Not only do you have to stay on top of paying the correct amount of tax, but you also need to manage your audit trail, various health and safety requirements and be strict with your due diligence and understanding of different locations . .

If you’re in any doubt about compliance when contracting overseas, please contact 6CATS International, part of the Workwell™ group.