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As remote working becomes more widespread, and many people are going in search of destinations where they may enjoy a higher quality of life while lowering their cost of living, many have begun to explore the prospect of optimizing digital nomad taxes.
The truth is, most people in the world are liable to pay taxes somewhere in the world. However, that doesn’t mean it isn’t possible to legally reduce your tax burden by relocating to a nation where income earned outside of the country is taxed at a low or nil rate.
If you want the flexibility that a digital nomad lifestyle provides while avoiding unnecessarily high or double taxation, it may be worth looking into "going where you're treated best," as the NomadCapitalist says.
Disclaimer: It goes without saying that when it comes to financial and digital nomad tax matters, don't rely solely on online advice. We highly recommend consulting with a tax attorney who can properly advise you on your individual situation, especially when it comes to taxes for digital nomads.
That being said, it never hurts to be aware of your options so you may explore them with your tax expert to determine whether they are a good fit for you. As such, here are 5 best countries for digital nomads tax-
Greece is quickly gaining prominence as a destination that budding digital nomads will want to keep an eye on, not only because the country is incredibly stunning but also because of its generous tax breaks and keen desire to attract digital nomads.
For the first time, the idea of "digital nomads" was included in Greece's Immigration Code (Law 4251/2014) on September 4, 2021, with Law 4825/2021 coming into force on September 4, 2021, enabling remote employees from other countries to migrate to Greece. This policy offers a 50 percent reduction in income tax and social security payments. For example, the maximum tax rate for someone earning $40,000 will be reduced from 44 percent to only 22% under this scheme.
So this digital nomad tax incentive may be something to keep in mind, particularly if you're planning to sip gin and tonics overlooking the Mediterranean shoreline as the sun goes down.
Malta's mild temperature, laid-back atmosphere, and fascinating history all combine to make it an ideal place for digital nomads. Last year, Malta launched its Nomad Residence Permit, which enables digital nomads to work remotely from this stunning island for a year (renewable for up to 3 years).
The remittance basis of taxes is one of the most significant benefits of moving to Malta. When it comes to taxation, non-Malta residents pay taxes on their local income and some of their profits, but they are exempt from paying taxes on their worldwide income that hasn't been sent to Malta. As a bonus, they are not taxed on capital gains, even if this money is sent back to Malta. As a cherry on top, any money they earn from that remote work does not require them to do local fillings.
Yup, minimum taxes for digital nomads.
As if these benefits weren’t enough to convince you to move to the sunny island already, the tax rate may be reduced to 5% after applying for all subsidies and tax relief programs available if you register your firm in Malta as a digital nomad. Moreover, Malta offers the lowest cost of an EU-wide transferable company license (EU).
So there you go- another digital nomad tax-friendly country considered to be a gem.
The country of Portugal has a lot to offer digital nomads. Expatriates love it here because it's a safe place to live, there's good cuisine, and it's always bright and pleasant.
The Portugal Passive Income Visa (or D7 Visa) and the Non-Habitual Residence Tax are two of the government's primary tools for luring distant workers to the country. Tax-free overseas income and tax-free cryptocurrency are only two of the perks. As a bonus, both the income requirements and the minimum stay length are much lower than most other European countries.
Non-Habitual Residents (NHR) is a popular policy in Portugal that enables persons relocating to the nation to take advantage of tax benefits after they settle there.
With all this in mind, no wonder the Portugal is one of the most tax friendly countries for digital nomads from EU and non-EU countries alike!
Located in the eastern Mediterranean, Cyprus is one of Europe's sunniest and most desirable destinations. Starting January 2022, non-EU citizens who work remotely for companies or customers located outside of Cyprus have been able to apply for a Digital Nomad Visa with some exceptional incentives on taxes for digital nomads.
Cyprus has always attracted people interested in their “non-dom tax residency.” In case you’re not familiar, non-dom tax residents do not have to pay taxes on overseas earnings, 'passive' interest income, or profit from the sale of securities, as an incentive to recruit and maintain highly-skilled and highly-paid expats to Cyprus. Additionally, it has been proposed that new resident workers earning up to €55.000 per year would be excluded from paying 50% of their taxable income in 2022. Although this has not yet been adopted, we’re definitely going to be watching this space closely so you’ll be one of the first to know when it gets rolled out.
If enjoying delicious halloumi cheese paired with sweet dessert wine while soaking in one of the oldest cultures in the Med sounds like your jam, keep your eyes peeled for updates!
Tbilisi, Georgia's capital, is a vibrant city with a rich history and culture that harkens back to Europe. Caucasus highlands are ideal for trekking and skiing, while the black seashore is a great place to relax in the sweltering summer heat.
A new initiative called “Remotely From Georgia” has been designed to enable you to come and work in Georgia from anywhere in the world. Your monthly income must be at least $2,000 or a bank statement confirming $24,000 in order to qualify.
Georgia offers a fantastic program for individual entrepreneurs, which taxes just 1% of your business's gross revenue up to $155,000. This alone makes the most enticing visas available to digital nomads today.
The best part is that Georgia’s living costs are one of the lowest in Europe while offering excellent connectivity to the rest of the continent from Tbilisi, the capital. You don’t need to go on unnecessary visa runs or deal with too much red tape as it’s just a simple online form to apply.
If the streamlined digital nomad visa, generous digital nomad tax benefits, and spectacular landscapes don’t entice you, then maybe the delicious cuisine and the world's oldest wine culture will.
So there you have it. Hopefully, these tax friendly countries have inspired you to consider how you may optimise your digital nomad tax status compliantly while enjoying a high-quality lifestyle in Europe!