11 ms·

Digital nomads dont pay income tax?

by seper8 4y ago

jwestbury 4y ago
In most countries, I believe they should, but if they're being paid from another country, it may be relatively easy to get away with not paying income taxes -- since the country of residence would have no record of the income in the first place.
- LudwigNagasena 4y ago
  As far as I know usually you can’t get a nomad visa without proof of income.
  - mejutoco 4y ago
    I wonder if savings count. In that case it could work too.
- refurb 4y ago
  This. I know a few people who work remote and just live on tourist visas in different countries. They get paid in the US and deposited in a US account. They have no bank account, ID number, nothing in the country. It's hard to enforce.
vkou 4y ago
Some do, many don't. Many don't even bother getting an appropriate work visa, at their latest port of call, there's no way they are going to be paying local taxes on that work.
DocTomoe 4y ago
Depending on their country of origin. Most western countries have rules that make income originating in other countries taxable in their home country (and then often have bilateral treaties that avoid income being taxed twice). Quite a few digital nomads are tax frauds, though.
- zoklet-enjoyer 4y ago
  If someone is traveling in a tourist visa, why should they pay local taxes? They'll put money into the local economies where they're traveling just like any other tourist.
  - DocTomoe 4y ago
    If someone is traveling on a tourist visa, they are not allowed to work in the host country. So now they are not only potential tax evaders both in their host country and their country of origin, a crime in many countries worthy of lengthy jail sentences, but also tack a visa violation on top of it.
    - sokoloff 4y ago
      If I’m visiting country C and read my work email or take a work Zoom call, have I violated my tourist visa? If I check that email all 6 nights in my 7 day stay? At some point, I think it flips from “a genuine tourist” to “an undocumented worker”, but I don’t think it’s easy to tell exactly when, especially if the actual job isn’t a local one. If I’m on a tourist visa and taking a local job, the country’s documented workers should rightly feel cheated. If I’m on a tourist visa and brought my own job from outside the country, I’m not sure those workers have nearly as much standing to feel I’m cheating them.
      - ben_w 4y ago
        > If I’m visiting country C and read my work email or take a work Zoom call, have I violated my tourist visa? If I check that email all 6 nights in my 7 day stay I would not be surprised, but that's a question for the lawyer and the answer may vary by which country you're in under a tourist visa. And likewise you may be owed overtime ;) > If I’m on a tourist visa and brought my own job from outside the country, I’m not sure those workers have nearly as much standing to feel I’m cheating them. Yeah well people are weird and not always consistent. From my point of view, people seem to care more about "immigrants taking our jobs" than they do about "foreigners staying at home and the factory was moved to where they already live" (not zero for the latter, this is just my opinion of the relative noise people seem to make).
cataphract 4y ago
Usually, no, not on foreign income (with the exception that now retirees pay 10% on their pension, but it used to be 0). And even on domestic income from work, they pay only a flat tax of 20%. The income tax is normally 50.5% on income over 80k and 53% over 250k.
devoutsalsa 4y ago
It depends. Generally speaking, you don’t become a tax resident of a country unless you live there for 183 days in a given tax year. Even then, getting set up to pay taxes is a challenge, as tax departments aren’t set up to accept money from a tourist who doesn’t have any official ties to the country. It can be done, but it’s a pain. As a digital nomad myself, I always planned to just never stay in a country longer than six months. As an American, I have the joy of paying American taxes anywhere I live in the world, which makes things extra fun. For now, it seems systems are not streamlined to handle the burden of a high number of short term residents. Countries will adapt over time, as it seems Portugal is doing now. Some countries issuing digital nomad visas may exempt nomads from paying taxes or make it easier to pay taxes locally.
- logifail 4y ago
  > Generally speaking, you don’t become a tax resident of a country unless you live there for 183 days in a given tax year 183 days may indeed be sufficient to automatically qualify you for tax residency, but there are other tests, if you're not careful you may (unwittingly) become tax resident in a country with a stay of less than 183 days. Perhaps significantly less, depending on where else you've been (and for how long), and what you were doing in the year(s) before the year in question. See - for instance - the Statutory Residence Test ( https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/guidance-note-for-statutory-residence-test-srt-rdr3 https://www.gov.uk/government/publications/rdr3-statutory-re... ) in the UK.
qikInNdOutReply 4y ago
They call it the tour, basically you travell along the mediteranean, from AirBnB to AirBnB, working from cafes.. you are not a permanent resident in any of the countries.. :D
- nicolas_t 4y ago
  Depending on dual taxations agreements of their country of origin, they most likely would have to pay tax if they followed the law. There's often a clause in the different dual taxations agreement that says that describe how to determine tax residency in case the person hasn't stayed in any country more than 183 days. Usually, it's the country where that person has the "centre of vital interests" or sometimes can be determined by nationality. Digital nomads are still too new a phenomenon that countries really properly seek to tax them but just traveling like this without being careful or creating a company in a country with low taxation is not necessarily safe.
- dgellow 4y ago
  It’s often repeated online but that won’t work as a defense in courts. It can be qualified as tax evasion, in theory any country visited during the “tour” could ask for taxes if they believe you’re trying to escape the system.

Digital nomads dont pay income tax?

by seper8 4y ago

Digital nomads dont pay income tax?

In most countries, I believe they should, but if they're being paid from another country, it may be relatively easy to get away with not paying income taxes -- since the country of residence would have no record of the income in the first place.

LudwigNagasena 4y ago
As far as I know usually you can’t get a nomad visa without proof of income.
- mejutoco 4y ago
  I wonder if savings count. In that case it could work too.
refurb 4y ago
This. I know a few people who work remote and just live on tourist visas in different countries. They get paid in the US and deposited in a US account. They have no bank account, ID number, nothing in the country. It's hard to enforce.

vkou 4y ago

Some do, many don't. Many don't even bother getting an appropriate work visa, at their latest port of call, there's no way they are going to be paying local taxes on that work.

DocTomoe 4y ago

Depending on their country of origin. Most western countries have rules that make income originating in other countries taxable in their home country (and then often have bilateral treaties that avoid income being taxed twice). Quite a few digital nomads are tax frauds, though.

zoklet-enjoyer 4y ago
If someone is traveling in a tourist visa, why should they pay local taxes? They'll put money into the local economies where they're traveling just like any other tourist.
- DocTomoe 4y ago
  If someone is traveling on a tourist visa, they are not allowed to work in the host country. So now they are not only potential tax evaders both in their host country and their country of origin, a crime in many countries worthy of lengthy jail sentences, but also tack a visa violation on top of it.
  - sokoloff 4y ago
    If I’m visiting country C and read my work email or take a work Zoom call, have I violated my tourist visa? If I check that email all 6 nights in my 7 day stay? At some point, I think it flips from “a genuine tourist” to “an undocumented worker”, but I don’t think it’s easy to tell exactly when, especially if the actual job isn’t a local one. If I’m on a tourist visa and taking a local job, the country’s documented workers should rightly feel cheated. If I’m on a tourist visa and brought my own job from outside the country, I’m not sure those workers have nearly as much standing to feel I’m cheating them.
    - ben_w 4y ago
      > If I’m visiting country C and read my work email or take a work Zoom call, have I violated my tourist visa? If I check that email all 6 nights in my 7 day stay I would not be surprised, but that's a question for the lawyer and the answer may vary by which country you're in under a tourist visa. And likewise you may be owed overtime ;) > If I’m on a tourist visa and brought my own job from outside the country, I’m not sure those workers have nearly as much standing to feel I’m cheating them. Yeah well people are weird and not always consistent. From my point of view, people seem to care more about "immigrants taking our jobs" than they do about "foreigners staying at home and the factory was moved to where they already live" (not zero for the latter, this is just my opinion of the relative noise people seem to make).

cataphract 4y ago

Usually, no, not on foreign income (with the exception that now retirees pay 10% on their pension, but it used to be 0). And even on domestic income from work, they pay only a flat tax of 20%. The income tax is normally 50.5% on income over 80k and 53% over 250k.

devoutsalsa 4y ago

It depends. Generally speaking, you don’t become a tax resident of a country unless you live there for 183 days in a given tax year. Even then, getting set up to pay taxes is a challenge, as tax departments aren’t set up to accept money from a tourist who doesn’t have any official ties to the country. It can be done, but it’s a pain. As a digital nomad myself, I always planned to just never stay in a country longer than six months. As an American, I have the joy of paying American taxes anywhere I live in the world, which makes things extra fun. For now, it seems systems are not streamlined to handle the burden of a high number of short term residents. Countries will adapt over time, as it seems Portugal is doing now. Some countries issuing digital nomad visas may exempt nomads from paying taxes or make it easier to pay taxes locally.

logifail 4y ago
> Generally speaking, you don’t become a tax resident of a country unless you live there for 183 days in a given tax year 183 days may indeed be sufficient to automatically qualify you for tax residency, but there are other tests, if you're not careful you may (unwittingly) become tax resident in a country with a stay of less than 183 days. Perhaps significantly less, depending on where else you've been (and for how long), and what you were doing in the year(s) before the year in question. See - for instance - the Statutory Residence Test ( https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/guidance-note-for-statutory-residence-test-srt-rdr3 https://www.gov.uk/government/publications/rdr3-statutory-re... ) in the UK.

qikInNdOutReply 4y ago

They call it the tour, basically you travell along the mediteranean, from AirBnB to AirBnB, working from cafes.. you are not a permanent resident in any of the countries.. :D

nicolas_t 4y ago
Depending on dual taxations agreements of their country of origin, they most likely would have to pay tax if they followed the law. There's often a clause in the different dual taxations agreement that says that describe how to determine tax residency in case the person hasn't stayed in any country more than 183 days. Usually, it's the country where that person has the "centre of vital interests" or sometimes can be determined by nationality. Digital nomads are still too new a phenomenon that countries really properly seek to tax them but just traveling like this without being careful or creating a company in a country with low taxation is not necessarily safe.
dgellow 4y ago
It’s often repeated online but that won’t work as a defense in courts. It can be qualified as tax evasion, in theory any country visited during the “tour” could ask for taxes if they believe you’re trying to escape the system.