Home › Forums › General › Financial, Tax and Insurance › Subsea7 20% hypothetical withholding tax
- This topic has 8 replies, 6 voices, and was last updated 12 years, 10 months ago by
James McLauchlan.
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October 18, 2011 at 2:24 pm #4617
Wade Berglund
ParticipantHello there guys
Just curious I need to find out some information about the Subsea7 withholding tax. I have been offered a position with them and need to find out from someone how this works and how they deal with it.
My main concern is…..is that if I am currently paying taxes from my offshore wages in my country of residence, why do I need to pay another level of tax of 1/5 my wages on a hypothetical situation?
Any constructive advice and feedback would be appreciated.
Cheers
October 19, 2011 at 12:43 pm #31592David Shannon
ParticipantIt has been a while since I have been offshore but what I think could be an explanation is ..,
Subsea 7 is possibly withholding some tax to pay you income tax in different countries which have different tax regiemes e.g. Norway, Denmark, Brazil etc. This was something that crew on seismic ships had to deal with.
I would not expect that you will be taxed twice, when you fill in a UK tax form to recover any tax, you would presumably be able to show that you have had the tax deducted at source (assuming you are PAYE). If any of that was earned in UK sector or other relevant sectors you would be able to reclaim that. It means that your company can effeciently pay relevant tax authorities by taking a typical amount – you may still have to contribute more or receive rebates if there is a difference.
THis is a generalised answer, based on knowledge of colleagues – it does not surprise me. You need to check you are not being taxed twice and what happens at the end of the tax year when these things need to be balanced.
Digger
January 23, 2012 at 3:43 pm #31593ParticipantThanks for your advice there digger…much appreciated
January 24, 2012 at 10:21 am #31594Herman
ParticipantHi Trimtank
I see it has been a while since you first asked your question. Just wondering how it is working out for you?
😯
January 24, 2012 at 2:14 pm #31595ParticipantHello John
I got a preliminary offer of work and I wanted to negotiate the offered day rate and this "hypothetical hold back tax". I sent off some e-mails to the HR lass in question and low and behold. She never returned my e-mails. As well her voice mail message says that her voice mail does not work so don’t bother leaving any messages.
Not very professional coming from a large company like this.
Thanks for your input and opinions much appreciated.
February 1, 2012 at 5:13 pm #31597Woodchopper
Participanttrimtank…pm sent 😯
February 1, 2012 at 6:02 pm #31596James McLauchlan
ParticipantSubsea 7 is possibly withholding some tax to pay you income tax in different countries which have different tax regiemes e.g. Norway, Denmark, Brazil etc. This was something that crew on seismic ships had to deal with.
I get why they might be doing it, but if they withhold 20% back across the board (no matter where they send you) how does anyone know where that 20% is going? Unless anyone can advise differently there appears not to be a mechanism in place to clearly show the subcontractor where (if anywhere) this 20% has been paid to. How does anyone know if SS7 paid that 20% to HMRC or any other tax authority? Do they send a copy of the receipt from the tax authority they paid the money to?
One could almost live with 20% being withheld if there was irrefutable proof that 100% of the withholding tax the money had been passed on to a certain tax authority. You could then set about claiming any repayments that might be due from the tax authority in question rather than having to chase SS7 to see where your money went. I could imagine how much fun that might be!
I’d be very suspect of this practice, unless SS7 can show that what they are doing is a legal requirement and there is clear traceability of funds.
Quick reality check here (for anyone reading this)…. It’s a 20% pay cut unless you have evidence of where your money has gone. It is your money so you need to know where it is.
If SS7 won’t answer pertinent questions along those lines, as trimtank seems to have experienced so far, then walk away from them.
February 3, 2012 at 9:40 pm #31598William Peel
ParticipantHow does anyone know if SS7 paid that 20% to HMRC or any other tax authority?
I worked for Subsea Offshore in the late 1990s. They took a Withholding Tax if you worked in the Dutch Sector. I wrote to the Dutch Tax people asking for a rebate. Surprise, surprise, they had nothing to give me a rebate with, as they had not received any tax receipts from Subsea.
When Halliburton took over, I started a lengthy correspondence with the Finance Department. They said they had only just discovered the problem. In other words, Subsea had been pocketing the Withhholding receipts and not passing them on to the Dutch.
After a couple of years of this correspondence, I gave up because nothing seemed to be happening. I accepted that my money had been stolen.
Fast forward another 2 years and I was astonished to get a letter in Dutch advising me that a rebate had been paid into my account.
I can only assume that HS had at last paid my taxes to the Dutch, though they never sent me any acknowledgement..
February 4, 2012 at 1:27 am #31599ParticipantWhat sarby has written above is a prime example of why people should wary of this practice.
Unless it can be proven (by the company doing the withholding) where your money is going, and that it is legally being withheld, walk away or accept the fact that you are agreeing in advance to a 20% day rate cut.
Imagine if a company withholds 20% of your day rate, doesn’t pass it on to the relevant tax authorities and then goes bust. You’ll never claim a thing back. Game over.
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