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No, that's not the case for the most part. For example, the Croatian digital nomad residence permit that this article is about provides an exemption to income t
by closewith 1y ago
No, that's not the case for the most part. For example, the Croatian digital nomad residence permit that this article is about provides an exemption to income tax for earned income while working for a foreign company and living in Croatia. This means that most digital nomads can work tax-free in Croatia.
This contrasts with, for example, Ireland, where not only does a digital nomad's income become subject to local tax on day 1, so does their company (if they are the beneficial owner).
Croatia's approach is excellent if you want many wealthy (compared to local standards) people to bring an influx of hard currency into your economy, at the cost of inflation. Eventually the benefits outweigh the costs and the government begins to subject digital nomads to local taxation and stricter visa rules.
- oytis 1y agoWhat's the benefit to have rich people in your country if they don't pay taxes and don't create any meaningful amount of jobs?
- closewith 1y agoThe benefit is similar to remittances - you get a huge influx of hard currency as digital nomads freely spend their high salaries. That does create jobs and raises tax revenue through consumption taxes and downstream employment. It's very similar to tourism - digital nomads are effectively semi-permanent tourists. However, like tourism, it causes inflation, prices out locals, and can detract from more sustainable, natural economic growth (the so-called tourism curse). So like tourism, developed economies inevitably place limits on digital nomads. That can take the form of stricter visas, capped numbers, or by implementing tax reforms.
- FirmwareBurner 1y agoSince digital nomads use the same public infrastructure and amenities as the people who live and work there, why shouldn't they also pay the same taxes?
- closewith 1y agoI think it's up to each country. Some jurisdictions have done very well from allowing digital nomads. Personally, though, I think they should be subject to local taxes and I'm glad they are in my country.
- FirmwareBurner 1y ago>Some jurisdictions have done very well from allowing digital nomads. Which? How did they "do well?
- techcode 1y agoNomads and even more permanent expats use less of the infrastructure and amenities. Not just for periods before and after they are living there - also during their stay. For example. If they (nomads) lose their (remote) job - they won't get social benefits payments like the "locals". They (nomads) also don't accrue retirement/pension which is usually part of income taxes. And of course they pay all the other "taxes". If they rent/buy anything - there's VAT. If they drive around in their car - they pay registration, insurance, road tax, highway tolls. Pretty sure they also need to purchase some sort of health insurance.
- closewith 1y agoI think it's pretty clear that digital nomads, like tourists, use _more_ taxpayer resources because they use public infrastructure much more than the locals, who like most people globally live simpler lives mostly at home.
- techcode 1y agoIt's not clear to me. Perhaps we have different ideas about what "taxpayer resources" and/or "public infrastructure" is? I was highly skilled migrant/expat, now "naturalized Dutch", and work for Booking.com - so I know a thing or two about tourism (beyond just traveling myself). Tourists least, digital nomads a bit more, and expats even more - use public infrastructure. But over lifetime, locals use order of magnitude more than expats.
- jurking_hoff 1y ago[dead]