{"id":2951,"date":"2022-06-17T11:31:08","date_gmt":"2022-06-17T11:31:08","guid":{"rendered":"https:\/\/tucanoprod.com\/?p=2951"},"modified":"2022-06-17T11:32:51","modified_gmt":"2022-06-17T11:32:51","slug":"how-do-digital-nomads-avoid-paying-taxes","status":"publish","type":"post","link":"https:\/\/tucanoprod.com\/en\/how-do-digital-nomads-avoid-paying-taxes\/","title":{"rendered":"How do Digital Nomads avoid paying taxes?"},"content":{"rendered":"<p><span data-preserver-spaces=\"true\">Yes, digital nomads can legally avoid paying taxes. Choose the proper jurisdiction and structure, be transparent and respect the rules of international tax compliance. And of course, read this post and ask your lawyer and accountant.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">If you are not a citizen of the US or Eritrea, you have an excellent chance to become a tax-neutral or offshore person. Someone who is tax-exempt but still fulfils all the international tax compliance requirements and is not a crook.\u00a0<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">What do you need to avoid paying taxes as a digital nomad legally?<\/span><\/h2>\n<ul>\n<li><span data-preserver-spaces=\"true\">First, you will need an appropriate tax jurisdiction where foreign-sourced income is not taxed.<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Become a resident and a tax resident.<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Maintain your tax resident status by<\/span><\/li>\n<\/ul>\n<ol>\n<li><span data-preserver-spaces=\"true\">staying there enough time to keep your tax resident status<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">or do not stay enough time in other countries to become a tax resident elsewhere.<\/span><\/li>\n<\/ol>\n<ul>\n<li><span data-preserver-spaces=\"true\">File or do not file your income and VAT. The reporting requirement depends on each country&#8217;s tax laws.\u00a0<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Enjoy life.<\/span><\/li>\n<\/ul>\n<h2><span data-preserver-spaces=\"true\">What is the legal base for avoiding paying taxes as a Digital Nomad?<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">There are more than 30 countries where foreign-sourced income is not taxable or tax-exempt. <a href=\"https:\/\/www.nasdaq.com\/glossary\/t\/territorial-tax-system\" target=\"_blank\" rel=\"noopener\">You can check here the meaning of territorial taxation.<\/a>\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">There are different jurisdictions with different laws. If you can find a country where foreign-sourced income is tax-exempt, and you can maintain your tax resident status with minimal staying requirements, you are on the best way to becoming a tax-neutral or offshore person. You always will need the opinion and advice of your lawyer and accountant. International tax compliance is constantly changing. However, there are some clear rules you must follow. If you stay in a country long to become a tax resident, please respect the law and fulfil your duties.\u00a0<\/span><strong><span data-preserver-spaces=\"true\">However, if you maintain your no-tax status and do not become a tax resident elsewhere, you become practically tax neutral.\u00a0<\/span><\/strong><\/p>\n<h2><span data-preserver-spaces=\"true\">How to choose the best location for tax residency to avoid paying taxes legally?<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">More than 20 countries offer tax reliefs and short-term residency solutions (digital nomad visas) for location-independent people but only for a limited time. The newest is Indonesia, which provides a tax break for five years if you work, for example, from Bali. Do not forget that if you choose a digital nomad visa, you should change your tax jurisdiction in your home country and at your bank. Perhaps you do not even want that, then keep paying your taxes at your original country of tax jurisdiction and not in the country where you reside for a year or more as a digital nomad.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">But some countries provide a lasting solution to forget paying tax on your not locally sourced income. Those are (among others) Paraguay, the UAE and Panama.\u00a0<\/span><\/p>\n<h3>Where to become a tax resident if you plan your digital nomad career for only one year or short-therm?<\/h3>\n<p>Any digital nomad visa will serve you. My personal advice is that if you are planning to stay in one or more countries for one year or a couple of months, do not even change your tax status in your home country.<\/p>\n<h3>Where to become a tax resident if you plan your digital nomad career for the long term?<\/h3>\n<p>I have been working with digital nomads&#8217; residency, citizenship and tax issues for more than a decade.<\/p>\n<p>There are always particular issues, not all digital nomad careers, markets, requirements, and solutions are the same. However, there are some jurisdictions I can recommend in most cases. These are the best locations for digital nomad taxes and tax residency in 2022.<\/p>\n<p>In the EU: <strong>Malta<\/strong><\/p>\n<p>Close to the EU: <strong>Montenegro<\/strong><\/p>\n<p>Central-America: <strong>Panama<\/strong><\/p>\n<p>South America: <strong>Paraguay\u00a0<\/strong><\/p>\n<p>Africa: <strong>Cabo Verde<\/strong><\/p>\n<p>Asia: <strong>Laos<\/strong><\/p>\n<p>Overall, Paraguay is the best location, it&#8217;s not a coincidence that I work from Paraguay. No tax on foreign-sourced income, easy to keep your tax residency, and almost no bureaucracy.\u00a0 Moreover, the cost is affordable.<\/p>\n<h2><span data-preserver-spaces=\"true\">Which countries should you NOT consider as tax jurisdiction?<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Here comes the problem: I can&#8217;t degrade any location because each has its advantages and disadvantages. But there are some critical issues to think about.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">European digital nomads know very well that some contractors do not accept invoices or location-independent people working from some countries. If you work for a Swiss, German or Austrian company, they usually receive invoices only locally issued invoices or maximum from EU member states. Accountants and contractors are still unfamiliar with our globalised world in other countries. And they do not know what to do, I mean, how to accept these invoices, so it&#8217;s easier for them to refuse. Online betting companies or casinos usually do not let their remote workers do their job from not 100% secure countries.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">On the other hand, some jurisdictions are opaque a little bit sometimes. For example, Panama and the UAE or some Caribbean locations have regular problems with the EU or the US, so some countries can easily land on the grey or blacklists. Moreover, the countries are continuously removed from the list and later listed again. Lack of knowledge may create a hazardous and unpredictable situation for smaller entrepreneurs. You can always reach here the EU financial blacklist (<a href=\"https:\/\/www.consilium.europa.eu\/en\/policies\/eu-list-of-non-cooperative-jurisdictions\/\" target=\"_blank\" rel=\"noopener\">non-cooperative jurisdictions<\/a>.)<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Do you want to plan your personal international tax compliance issues according to the laws but maximising your income? (it means that do you want to avoid paying taxes as a perpetual traveller digital nomad?) I am here to plan your structures.\u00a0<\/span><a href=\"https:\/\/tucanoprod.com\/en\/contact\/\" target=\"_blank\" rel=\"noopener\"><strong><span data-preserver-spaces=\"true\">Let&#8217;s set up a consultation<\/span><\/strong><\/a><span data-preserver-spaces=\"true\">, which costs 99 euros, and we will go through all the details. (<a href=\"https:\/\/www.linkedin.com\/in\/bencezakonyi\/\" target=\"_blank\" rel=\"noopener\">I have been a researcher of tax, residency and citizenship structures<\/a> since 2008 when I became a digital nomad)\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Yes, digital nomads can legally avoid paying taxes. Choose the  [&#8230;]<\/p>\n","protected":false},"author":1,"featured_media":2952,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[503,504,502],"class_list":["post-2951","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-second-passport","tag-digital-nomad-avoid-tax","tag-digital-nomad-no-tax","tag-digital-nomad-tax"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How do Digital Nomads avoid paying taxes?<\/title>\n<meta name=\"description\" content=\"Digital nomads can avoid paying taxes. 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