Taxation for Digital Nomads – Questions to Ask Yourself

As a traveller flitting from one country to the other, how will I go about doing my taxes?

Even if you are travelling from country to country, you can still be subject to paying taxes so long as you are still a resident of your home country.  There are a number of factors that taxation agencies will use to calculate if you are still considered a tax resident.  Please check official documentation or consult with an advisor.

In addition you potentially still paying taxes in your home country, you may still be subject to paying taxes in the new country that you are residing in.  This is dependent on whether or not you are considered a resident for taxation purposes. For example, if you are living in a country for 183 days or more you may then be considered a resident, for taxation purposes, of that country. If you are living in a country are your source of income is in that country, then that may also mean paying taxes for that income source.

If you are considering trying to get income ‘under the table’ make a note that eventually you may need to fold underneath some sort of business structure like an LLC, LTD, etc. You may also need to have a unique tax number to identify yourself.  A number of businesses will require you to operate as a business, rather than as an individual for a number of reasons – for auditing purposes, for liability protection and so on.  In addition, without further identifying yourself and your income activities, it may be difficult to do any further paperwork within that country should you need to – for example, in answering income related questions when applying for long term or permanent residency or citizenship.