|Author||Travelling across EU and taxes|
English version of my nickname is "Nikolay", you can call me "Nick". :)
I have a question about legal things in the EU, hope somebody here knows how it works.
What's the deal?
I'm a software engineer and I work remotely in a non-EU country. Also, I have EU citizenship (Romanian) as my second citizenship. I don't use this Romanian citizenship for work, just sometimes for traveling.
I want to travel across Europe using it for long ranges like 3+ months in some places.
From what I read on the internet I understood that if I stay in a country for 3 months I have to start paying taxes there. Is it right?
Is there a way to pay taxes in my non-EU country and travel across Europe?
If no can I at least stay in a country for 2 months 29 days and go to another country without paying taxes locally? :D
|Hi, as long as you do not register place of residence and do not take additional work in EU countries, I dont think that anyone would try to prove any income tax liabilities that you would have in those states. |
|Yes what Elrind said. You will be fine! Enjoy the vacay :D |
|Nice UCI! Looks cool |
|I would advise caution, my day job is as an accountant but not specifically taxation. I give basic financial advice to people on the internet|
Overseas tax residency is extremely complex and depends on a myriad of factors. 'you'll probably be fine is definitely the wrong approach' it can lead to cross border penalties and serious administrative headache.
It depends very specifically on your current residency status, where you will travel to and exactly how long for. Income tax is also not the only concern as there are often different rules for social taxes. For instance I am UK tax resident and if I moved to an income tax free jurisdiction I would still owe the UK tax authority 12 months of national insurance which is like a pension/healthcare tax. There are more complex rules for capital gains tax and temporary non residency.
There are two other concerns. The first is covid which may prevent you moving and force unwanted tax residency by keeping you in one place for too long. It could prevent you from travelling back to Romania which could mess up your tax status there.
The second is 'challenge' from the tax authority. Tax residency has qualifying criteria and the authorities can argue that you are tax resident based on criteria such as where you live, work, buy your groceries etc.
What you are suggesting is completely possible, many people are digital nomads and it works well. But it is imperative you do your homework.
You are best off seeing a professional who specialises in digital nomads. If you fly around without giving it second thought it can really bite you in the ass later on. In the UK the tax authority has more power than the police, they can check your visa record, bank accounts, audit all your purchases etc.
|Well just think it through. Within EU, countries have different approach to that, there are more and less liberal states for taxation concerns but if your permament place of residence and your employer (if it applies) are outside EU, and you come to EU officially as tourist, it will be very hard for them to find you living in selected state for any exact period or to make them think that you work there. |
I do not advise ignoring all tax regulations, and openly coming with intention to live and work as much as you like without paying income taxes in that state. Just saying that if you keep your intentions to yourself and abide basic taxation rules in selected state, you should be fine.
|OP see a professional. It is not as straightforward as it first appears. |
There are also problems at the employers end. I know of a guy who has just been fired because he moved to South Africa without telling his employers finance department. The employer is facing fines/investigation/legal action from the South African authorities for unpaid payroll taxes.
|Depends on what Nick is going for. As I understood it is for vacation/travelling. Not for work (I can be wrong?). If he wants to work/earn then it is better to be aware of certain authorities. |
|The first is covid|
Not a big problem - during covid I visited 3 countries :D
back to Romania
I don't live there, just have their passport
it can really bite you
Yeah, I want to understand the rules to escape fines
As I understood it is for vacation/traveling
Kind of - I want to live for some months in some EU places like Praha, Budapest, etc
Like to live in one place for half a year and then go to another
I would like to travel across Europe in such a way, then maybe other regions
Not for work
I want to continue to work remotely as I do now in the same company
I'm not sure if it counts as work in another country
|I won't say I am 100% sure about UK so seeking advice from a professional would be the most prudent option. But generally speaking, most countries follow the 183-day rule. The 3-month rule that you ask about probably applies to Switzerland only. |
I can tell you that in the US, a visitor must have a combined stay over 6 months (greater than 183 days to be precise) in three consecutive years in order to be considered a tax resident. There are other stipulations that allow a person to be exempt from establishing what is called a substantial presence in the country, and therefore, avoid any tax obligations but those are very specific conditions and it does not sound likely they will apply to you.
Now, frankly speaking, you have nothing to worry about. Staying in Europe and being remotely employed with your current non EU company is not considered foreign employment. That would be ridiculous. So you should be totally fine as long as you are not seeking gainful employment whilst staying there.
|The 3-month rule that you ask about probably applies to Switzerland only|
I read that if you are an EU citizen you can stay in an EU country for 3 months and then you must go to the local regulator to ask residence status or you can get a fine
you should be totally fine
It's my dream to travel non-stop :)
|I read that if you are an EU citizen you can stay in an EU country for 3 months and then you must go to the local regulator to ask residence status or you can get a fine|
Where did you read that? This is the first time I am hearing of a fine for failing to request residence status. In fact, it should be more difficult to get residence status if you dont meet certain requirements like employment, property ownership, or active business, etc...
|Where did you read that?|
In some answers on quora
ine for failing to request residence status
not for failing request - for not requesting after 3 months
is it false?
anyway, the most important part is to not be required to pay taxes in each country :)
|English version of my nickname is "Nikolay", you can call me "Nick". :)|
Wy not Kolya? ))
|In reality it all depends where & how you get paid.|
If you are physically going into a place of work then the company will normally put you on the payroll and deduct all relevant taxes before paying you.
If you invoice the company you are working for then you would normally be paid without any taxes being deducted (though might be some sales tax) and you would normally be expected to sort your own income tax yourself in your home country of residence.
It is extremely unlikely you would be noticed by a foreign countries tax office during a short, under 6 months, stay.
You are more likely to fall foul of the laws regarding where your car is registered & insured than anything tax related.
If you pass through any border controls be ready for questions about how you support yourself. They are mainly looking for money laundering but will share concerns with tax authorities if they suspect any avoidance
|DEATHisNEAR, that's a name I haven't seen for a long time. Welcome back. |
|Wy not Kolya? ))|