Let’s talk about tax-friendly countries for digital nomads!
Yes, you read it right. There are a few countries that offer quite some generous (let’s put it this way) tax benefits aiming to attract remote workers from all over the world to fix their work base there.
In a time when remote work is still growing and getting a growing interest from professionals from several areas, it comes with no surprise that digital nomads (or remote workers, as you wish), are looking for the most suitable and beneficial countries to set their roots. This means, they are looking for destinations where they can achieve a better quality of life, while (at the same time) reducing costs. That makes sense, right? It’s the best of both worlds: you can travel, set your office in a destination of choice and still get the best financial situation. Sounds good!
That’s where taxes come to light. And yes, we know it’s not the best subject, but as we all know, it is something we must take care of.
We have already written about remote work taxes and how digital nomads, in general, must cope with it. Most importantly, what must be taken into consideration (namely, how remote workers must file for taxes in their residence country while complying with the local taxes of the country where they are located).
However, we also mentioned that countries (at least some) have been working on this matter to smooth things up and avoid double taxation for remote workers. This means that they have been working to create some exceptions for professionals working and living abroad, to reduce their tax rates.
This takes us to the main subject of this article: the tax-friendly countries for digital nomads. And Europe has a quite nice top seven for you to consider. Just keep reading!
Tax-friendly countries: Europe’s top destinations for digital nomads
Without further ado, here are the seven most tax-friendly countries in Europe for remote workers.
Yes, our tiny rectangle of land by the sea made the list. But if you think about it, it’s no news. We’ve already told you that Portugal is considered a WFH (work-from-home) destination of choice and it has even been named the best country in the world for professionals to be remote workers. But there are more reasons for Portugal to enter the top seven tax-friendly countries.
Digital nomads not only consider the country as a safe place to live, but they also point out the gastronomy and the climate (of course).
But there’s more to it. Portugal has some specific rules for remote workers, such as the fact that non-EU citizens with a passive income or a remote job can apply for a D7 Visa & Residence Permit allows them to extend their stay. While here, they can also apply for a Non-Habitual Resident (NHR) status, which is a special income tax regime that enables remote workers to move to the country and have access to some quite favourable tax benefits (you can learn more about it here).
Greece is also on the list of tax-friendly countries for digital nomads, and it goes beyond the beauty of the country (which is undeniable). Greece has included a specific law for digital nomads in the Immigration Code (Law 4251/2014, with Law 4825/2021), which enables these professionals to work there while having access to a 50% reduction in income tax and social security payments.
Yes, this might seem like a touristic guide, but while Malta also follows the trend of sunny countries with pleasant sightseeing, it’s not the main reason why it made the top seven tax-friendly countries for remote workers.
It’s the Nomad Residence Permit launched by the country, which enables digital nomads to establish there while having access to a fee basis of taxes. Non-residents just pay their taxes based on their local income and a part of the profits, but they are excused to pay taxes on their worldwide income and don’t have to fill for these locally. The Nomad Residence Permit is renewable for up to three years.
In addition, professionals who register a firm in Malta can have access to a 5% tax reduction on subsidies and tax relief programs available.
Also, the country has the lowest EU-wide transferable company license cost.
Another Mediterranean gem makes the list of the most tax-friendly countries in Europe for digital nomads.
Just last January, the country made available a Digital Nomad Visa for non-EU citizens working remotely for companies or customers outside Cyprus.
This comes to add the country’s “non-dom tax residency” policy. Let’s break this down. This non-domicile concept for tax purposes applies to foreigners who move their tax residency to Cyprus, thus being automatically considered as non-domiciled in Cyprus for a maximum of 17 years. This means that professionals under this policy are exempt from Special Defence Contribution (SDC), thus enjoying dividend, interest and rental income free from SDC tax in Cyprus.
The country is also studying additional measures for resident workers, such as the exclusion to pay 50% of their taxable income in 2022. This is yet to be implemented.
Full of history and culture, Georgia is also on the list thanks to the initiative “Remotely From Georgia”. Remote workers with an income of at least 1.895,20€ ($2,000) or bank extract with 22.742,35€ ($24,000) can qualify.
Plus, Georgia also offers a program for individual entrepreneurs, where they pay just 1% of their business’s gross revenue up to 146.877,67€ ($155,000).
But let’s not forget the fact that the country has one of the easiest processes to get a VISA, you just have to go online and fill out a form to apply.
Get ready: Croatia offers total exemption from taxes in the country for digital nomads. They just need to register as a tax resident in Croatia to be eligible. To do so they just have to register in the three months following the move there or – for non-EU citizens – to get a one-year Digital Nomad residence permit via the “Croatia, your new office” programme.
Last but not least. This one makes the list by providing a 70% tax exemption on all income generated in Italy, for self-employed professionals who register as Italian tax residents and bind themselves to stay there for at least two years.
Besides that, the Italian government launched recently a digital nomad Visa aiming to attract highly qualified remote workers.
What’s your destination of choice?
Now that you have full possession of this information, you just need to make a choice. Easy peasy, right?
But, to help a bit more, we have something else that might help you decide. Check out these open positions on our website.
Plus, in Landing.Jobs we can help any tech professional receive their salary in case they’re working for a company across borders. Interested? For further information click here).
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