Paying taxes as a digital nomad
Hello, I'm a software engineer who recently started the digital nomad journey.
So for the first time, I have to handle taxes on my own and it's not fun at all. Especially as a DN with income coming from multiple countries. The internet is full of resources, blogs, articles, etc. but I don't want to spend time and effort learning all that. I just want to find an accountant that's suited for my situation, pay her/him and focus on the more important stuff like finding clients etc. Finding the right accountant is tricky though because DNs can have very different tax situations. I found a few agencies online specializing in DNs but they seem to be tailored to seasoned DNs rather than people just starting out.
I'd like to find a place where I can enter my details and get matched with an accountant that has experience with my situation, or at least close to it. For example, at the moment I'm living in Portugal, working for an Australian company, and I'm an Italian citizen. An accountant who knows about laws in these countries could tell me where it's more convenient to pay taxes and all that.
Was it easy for you to find an accountant? Where did you look?
I'm thinking about building a website where DNs can recommend the accountants they've been using and others can find the one that's right for them. What do you think? And do you think DNs around the world would be willing to provide this information?
Any feedback/help would be appreciated, thanks!
If you build a site about this with resources, I'd sign up immediately! There's a huge need for accountants for digital nomads, part-time freelancers, and other non-traditional working situations and there doesn't seem to be a go-to place to find one. I've been looking for a productized service for it and haven't found any luck.
It's really difficult to find a decent accountant for one jurisdiction, let alone multiple countries. I totally agree there's a gap in the market here.
I noticed that PwC and some of those large professional services firms started offering a standardised monthly fee product for accounting (one country only I think) a couple of years back.
I'd love to see this kind of thing developed for nomads -- just pay a flat fee per month for largely automated optimisations. There's probably a travel recommendation opportunity wrapped up in that idea somewhere too e.g. "You need to do a visa run! Why not go to destination X this time?"
A lot of the information about how tax residency works is intentionally gated or complex, because the whole system is based on the idea that you have to pay someone who understands to tell you, instead of the information being freely available. That needs to change.
Yes, I'd like to have a go-to place to find accountants for DNs. I'm not interested in resources/information on how taxes work. I just want a list of accountants recommended by other DNs, be able to search by country, look at the reviews and choose the one I like. Do you think there would be a market for a product like that?
Don’t worry it’s not as complicated as you may feel, but I totally understand the challenge your facing. What if I told you that I’m building almost exactly what you described? But I would definitely love to talk to any freelancer or agency principle that has clients overseas and have to calculate sales tax and report to their nominated tax jurisdiction. I’m in the process of making this super easy for both client and freelancer/agency but would love to see if our global payment and tax solutions fixes this pain in the ass problem. Please hit me up on DM if you’d like to talk more about this
I moved my residency to Lebanon.
All income from outside Lebanon is tax free. Happy life.
It sounds like one of the problems here is DNs understanding where their tax residency is. Maybe it would be helpful to build a tool to solve that? Input your residency and incorporation details, upcoming travel and residency plans, and it could flag changes.
Nomad List already provides a way to track the number of days you've spent in different countries, and I think it has some automated alerts if you're getting near limits. I totally agree that there's a space for a dedicated global service here though.
I guess tax consultants are specialized in the country they reside, or maybe two, but not all at the same time. I would do like that: use a merchant of record like paddle.com or something similar for selling your digital product. So they take care of the customer side and you only have one invoice per month including all revenues. Then you also have an accountant in the country you reside at the moment, which at least doesn't have a ton of international sales he has to take care of. Also check beforehand which countrys are supported by the merchant of record. Maybe a legal entity for you business - like the estonian one - can be a help too. That model is also used by "stateless" people sometimes, but I don't think that's a good idea.
Good luck :-)
It all depends on where your tax residency is. If you stayed long enough in Portugal, this might be Portugal. Also, when you left Italy did you tell the authorities that you won't live there anymore? If not, they might still think that your tax residency is in Italy.
Finally, check if Portugal and Italy have a tax treaty so you don't end up paying the full taxes in those two countries.
PS: Talk to Portuguese & Italian CPAs. They will be able to answer these questions, but be careful. Not all CPAs are the same, some are very incompetent so do your own research to be able to tell which one is worth keeping...
I think Stonia E-Residency and Xolo is a great choice for digital nomads. Take a look.
They are awesome but ultimately you end up paying taxes where your tax residency is regardless of your e-residency and Xolo
can you explain me this a little bit? i am in latin america interesting in open my busness in stonia as a digital enterpenue