One of the important points that is often not addressed enough is taxation for Digital Nomads. Indeed it is important to know where to pay your taxes. One of the main mistakes is to think that you can pay your taxes in another country when you are abroad most of the year. This is not valid because each individual must have a place of residence, that is to say a postal address to remain legal under the law in a country where to pay their taxes.

Tax resident

The most important thing is tax residency. Thus it is necessary to spend more than 183 days of the year as a resident in a country to be able to pay its taxes. This is obviously a general theory that applies to many countries, but not all. For example, it does not work for the United States. This is why visas are important. You will never be a tax resident of another country on a tourist visa. You necessarily need a long term visa, and thus justify more than 183 days in the country. You will be recognized as a tax resident in two different countries, but you will not pay your taxes twice. Indeed, bilateral agreements will allow you to choose the country where you want to pay your taxes. This can be his country of residence or his country of birth

Social welfare

Social security must also be taken into account. Indeed, paying taxes in a country of residence does not necessarily mean having access to social security. Indeed it is often necessary to work in the country to have access to it. It is therefore important to be well informed before making a decision. In this case it may be necessary to operate with good insurance for digital nomads, or to pay a contribution to have access to the care services of the country where you live. Otherwise, treatment can be very expensive in many countries.

What to choose

From there you have to think about what might be best for your situation. Clearly, if you are on a tourist visa and you move regularly, you can forget about paying your taxes in another country. There may be some alternatives, but these are specific cases which we will not go into details. With a visa in a country that allows you to have a year-round residence, it is however possible to pay your taxes elsewhere with bilateral agreements. You must make your choice at the intersection of what you earn, the price you will pay depending on the country, but also whether being recognized for tax purposes in a country can give you rights in terms of social security.

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