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11 Comments

  • Good to see digital nomads posting about these issues. Education is important and tax advice from a professional is equally important. Both are critical so that you can speak intelligently to your advisor and make sure you are in compliance.

  • Have you looked into Estonian E-Citizenship ? It could well be a solution for a few Digital Nomads at least.

    All Best
    Dan Lawrence

    DigitalNomad.Global

  • Lee Says

    Awesome post. Tax is one of the things you not only cannot but should not avoid. Compliance is critical to avoid any unpleasantness whether from your home country or the country you are working in. Homework is always a great idea no matter how well versed you believe you are

  • Jack Says

    You cleared my mind about double taxation treaties! Now I know I don’t need to bother about these since I plan to be tax resident in only one country. I wonder what you would advise about getting a 2nd citizenship. I’m Dutch and I could quicky acquire the German citizenship as well. I’m planning to retire in Thailand or Peru. I’m thinking “if the Dutch start taxing their citizens abroad like the US, I drop the Dutch citizenship and keep the German one”. But this could cut both ways. I wonder if two passports = two sources of trouble, or if two passports = more options and more ways of muddying the waters. I realise there’s no clear-cut answer for this.

  • Gregor Says

    Great info. Question is, what do you do? Where do you spend most of your time, where is your residency, where do you de late taxes?

  • jak Says

    I am trying to get a definitive answer to this question , I have even written to the OECD ,but heard nothing ,is there an international tax advisor out there who can clariffy it.I

    Take for example three separate situations:

    A retired German couple who have been residing in Spain , and have now decided to sell their house and to be permanently travelling having a Pension paid to them from Germany.

    A French web designer who works freelance and invoices his customers from a company formed offshore

    A retired British businessman who has been travelling for ten years and lives off investments and savings

    If any of these European Nationals , who have been travelling for the last ten years and are not actually based in any one country for longer than say a period of ten weeks but spends time in 5 or more separate countries and continents, how and what is their tax position.They are under the 183 day rule for most countries requirements as a taxpayer.
    They all clearly can prove they are genuinely constantly travelling.

    There many more clear examples of people who are not resident in any one location and many retirees who are wishing to travel extensively that would welcome a clear answer.

    How do they meet the new requirements

  • i’m living in country X as a tourist, their tax department doesn’t know me and doesn’t care. Citizenship in country Y and residency in country Z. I think Y and Z should be different countries to make stuff easier for you and harder for the bloodhound gang called tax department.
    (I can’t get residency in country X because I don’t fulfill the requirements, so I can’t be a tax resident either. I wanted to pay them taxes, but they refused..)
    I pay taxes in country Z, that doesn’t check if I am actually there. And what if they find out? Maybe they will pay back my taxes :) They won’t inform country Y anyway, they don’t even know I’m here -

    What I want to say is, be smart guys, think about what they know. And enjoy tequilas!

  • Jay Says

    I like the article, BUT I don’t agree with the part about the tax treaties. You can benefit from them (maybe not ALL of them, but from many, it depends on their content) also if you’re a tax resident only in one country. The purpose of the treaties is to avoid double taxation and not (only) to clarify in which country you’re a tax resident. For example, many (if not most of) tax treaties reduce or exempt the tax rate you need to pay in one of the countries (either the source country or the country of residence) from income such as dividends, intrest or immovable property. As their aim is to avoid double taxation, they either exempt or reduce the tax rate not making you pay, say, 20% in the source country (the country you get your income from, you don’t need to be a tax resident there) plus additional 20% income tax in your country of residence. Let’s say, you receive dividend from country X, but you’re not a resident there and country X impose a wittholding tax on income earned in country X. The entity that pays your dividend ‘keeps’ that 20% and pays it to country X tax authorities. Then, your country of residence (Y) recognizes this income as an income that should be taxed there, because it taxes its residents on their worldwide income, so you need to pay that 20% in country Y on an income that have already been taxed in country X. The purpose if income tax treaties is to avoid such situation.

    • Ashray Says

      You are right. In the context of this article I should have specified that DTAAs aren’t a concern if you’re not tax resident in any country. They are fairly useful to avoid withholding taxes for tax residence in a country and receiving dividends or income from a treaty country. Of course they are much more important when two tax residencies get triggered but that situation is usually uncommon.

      • Jay Says

        Ashray, you’re right. It’s a very interesting topic, what happens if you’re not a tax resident in any country and if there are any situations when it’s actually not beneficial for you. I think I’m going explore this topic in depth the next week and write a blog post on Hurrao blog (hurrao.com/blog, if anyone is interested).

  • Alf Says

    Thoroughly interesting article with some great info. I think this article is worth a read too, if only for the fact that most people will never have heard of Anguilla! https://www.anguilla-beaches.com/offshore-companies.html

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