Digital nomads are supposed to pay tax in the country where they are registered as a tax resident.
Typically, tax residents need to be based in a country for 180 days to be registered to pay tax.
If you plan to travel as a digital nomad, you will need to check with the tax laws in your country to see how this affects you.
Digital nomad tax loophole.
Currently, digital nomads are getting caught in a tax loophole where they aren’t a resident in a country long enough to pay tax. However, many governments are closing the loophole and the last thing digital nomads want is to be hit with a tax bill that is backdated for missed payments.
You can always register a company or trust in a country and have the operations processed through the company or trust, so that you pay the correct tax to the right government.
You can also pay yourself through the company or trust based. You can then minimize your tax in accordance with the law of the country.
For example, in Australia, the first $18,000 in employed or business income isn’t taxed. If you paid yourself this income from a company as employment income, you would fulfill the legal requirements under Australian law. The income getting paid to the company would still need to be paid by the company, which in Australia is 30%.
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