Many countries have understood the importance of attracting expatriates and digital nomads to boost their economies after the Covid-19 crisis. And what better way to attract these self-employed workers than to offer them tax benefits? Here's a look at the countries that offer tax breaks and other benefits to digital nomads.
Tax benefits in Europe for digital nomads
In Europe, many countries have grasped the importance of attracting digital nomads to their land. These include:
Croatia
Croatia is said to be a paradise for digital nomads: they benefit from a total exemption from taxes in the country. To be eligible, all you need to do is become a tax resident in Croatia, by registering as such with the local authorities (within 3 months of moving there), or obtain a one-year Digital Nomad residence permit via the "Croatia, your new office" programme if you are not a European Union national (unless you are a national of a country benefiting from a visa-free regime).
Italy
Italy offers some of the most interesting tax advantages in Europe to attract mobile workers. In fact, self-employed workers who become Italian tax residents and commit to staying there for at least two years benefit from a 70% tax exemption on all income generated in Italy!
> Read also: The health system in Italy
Greece
In Greece, expatriate digital nomads benefit from a very advantageous tax system. They can claim a 50% tax exemption on their income for the first 7 years in Greece. To be eligible, you must of course declare your tax residence in Greece!
Where to get tax benefits elsewhere in the world?
Other non-European countries are welcoming expatriates with visa facilities and numerous tax advantages.
Costa Rica
In Costa Rica, digital nomads can not only benefit from a one-year renewable visa, but also from an income tax exemption and a tax exemption on the import of equipment necessary for their activity. The only condition is that they have a monthly income of over $3,000 (€2,770).
Panama
Panama's tax system is very advantageous for residents, but also for mobile workers. By applying for permanent residence, you will only be taxed on your Panamanian income. All income from clients based outside Panama will not be taxed!
Dubai
Dubai is well known to digital nomads and freelancers. In addition to offering an exceptional living environment and state-of-the-art infrastructure, residents are almost completely exempt from income tax.
> Read also: Health insurance in Dubai for expatriates
Measures to take before turning into a digital nomad
To benefit from the above-mentioned tax advantages, you must officially expatriate to the country in question, not just spend a few months there! Indeed, have a look at international tax conventions and your home country's laws to see what it means to be a tax resident.
So beware of double taxation! Although your home country may have signed bilateral tax treaties with many countries to avoid this situation, this is not the case for all countries. Depending on your future country of residence, you may have to pay taxes not only in your host country, but also in your home country.
Finally, beware of the health system in your destination country. Although some countries offer advantageous taxation for digital nomads, health costs can be much higher there than in your home country: this is the case in Dubai, for example! To be covered in case of a problem abroad, don't hesitate to take out health insurance specially designed for expatriates or remote workers from abroad.