Q: One of our employees is planning to leave the company due to the 20% tax he has to pay in France.
One of our employees is planning to leave the company due to the 20% tax he has to pay in France. He is Mexican and recently moved to France. Our company is based in the US, and we all work remotely since we are a startup. According to our contract, he is classified as a contractor, and he is solely responsible for his tax obligations. Initially, he asked if we could add at least 10% to his salary to cover the taxes, but due to limited resources, we are unable to accommodate this request. He also inquired if we could deduct the 10% from our tax declaration. I am unsure how to assist him and encourage him to stay. I would greatly appreciate your guidance and support in this matter.
A:
To get an answer you are going to have to get specific confidential advice from an attorney familiar with federal income tax. Under no circumstances should you consider misreporting the truth.
Good luck to you.
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A: Generally, contractors are responsible for their own taxes. Review the tax treaties between France, the US, and Mexico to understand tax obligations. Typically, a company cannot deduct an employee's personal taxes from its own tax declaration. Consider discussing other ways to support the employee, such as providing resources or connecting them with local tax professionals.
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