I'm trying to see any disadvantages for countries that do this, but the only thing I came up with is the possibility of distorting local rental prices. But presumably if enough countries offered such a visa, applicants would be spread over those countries, causing less distortion.
This could happen if the host country supplies plentiful public services funded mainly by income taxes rather than consumption taxes. Or simply if you lost your job and turned to begging or crime, and the host country finds it expensive or politically difficult to deport you.
These are pretty niche cases and most countries are happy to take wealthy, self-sufficient immigrants. But there are valid reasons why you might not want too open an immigration policy.
Why would you not pay income taxes in barbados though?
Perhaps there should be something like this: An International Creative or Digital Visa that countries can sign onto.
This proposal is a good start for what it should be: http://artsvisa.org/ireland/
Have something to contribute. Be able to support yourself. Don't compete for an in country job and any country should welcome your residence/citizenship.
There's no reason something like this doesn't exist in a global digital age.
Wouldn't this be tax fraud to claim an address in US as your paycheck address and not actually live there?
https://www.schengenvisainfo.com/news/pm-plenkovic-croatia-w...
I'm trying to see any disadvantages for countries that do this
E.g Spain might think "we'll get Americans to move here and do their U.S jobs" but what they actually get is, for example, Moroccans getting U.S jobs from Spain and more less chances of Spanish citizens getting U.S jobs.
Not... the most inspiring, but maybe the internet is good? That would be my biggest worry. It's an absolute must have.
I think life on a Caribbean island would be enough reason to ditch our usual high bandwidth vices like gaming and streaming for just a year.
If it’s broadband of any kind, it can be used for streaming. Even 3-5Mbps is workable for HD, with a bit of upfront buffering.
These look good on average, though if you click through to "Fastest Cities", some corners of the country look very slow.
Oh well, not the best of times to be travelling anyway, and doesn't seem like it's getting better for... a while anyway.
I do not necessarily personally recommend it but I know Safetywing is a popular choice for nomads and officially covers Covid. Otherwise you can look at either your countries of citizenship or residency that have international health insurance. IMO it makes sense to get an insurance from the country you would like to get repatriate to if you get in a very bad condition.
I would imagine that sours the value proposition quite a bit, at least for U.S. citizens.
[0] https://www.irs.gov/businesses/corporations/foreign-account-...
Currently, it's very possible to travel on a 3-6 month basis between countries under tourist visas and to work remotely in a somewhat illegal fashion. These nomad visas are an attempt to capture that market offering legitimacy for a fee.
Unfortunately, Barbados hasn't really hit the sweet spot here. It's possible to exist in Barbados for 6 months purely as a tourist and do the usual remote working gig where you just don't walk up to a tax official and start telling them you're working in an illegal manner. Or, you can now apply for this visa, stay the whole year, be legit, but you have to meet some conditions and hand over 2k USD which is pretty steep.
This removes the possibility of you being a burden on their public health system, which is common amongst not just these new 'nomad' visas but also the working holiday visas that have been around for decades.
It brings to mind a future organizational hypothetical of a "modularized citizenship" for work vs residence - unlikely as that may be given the tendency of nations to insist that their rules are the only rules and thus international laws are more like guidelines in practice.
The only thing stopping this is backward legal systems and the bureaucracy around these processes.
I imagine a lot of countries will take advantage of this and reduce bureaucracy in the recovery efforts post covid. Island nations and rapidly developing countries will probably pioneer this and young people from developed countries will probably try to escape their own high cost of living to these nations.
It's an independent contractor's dream, maybe. It's unclear what tax issues exist for W2 people.
https://www.numbeo.com/cost-of-living/country_result.jsp?cou...
https://www.inc.com/magazine/19980101/852.html
I'm shadowbanned, so if anyone who sees it cares to post the link, please do.
I do see the cases of multiple citizenships (and therefore multiple passports) increasing in the future, but I wouldn't hold my breath for it to become a common occurrence within our lifespans.
FACTA is burdensome if you have foreign bank accounts. You can avoid having foreign bank accounts to sidestep those rules.
That depends on the country. Some (I imagine most?) countries have deals with each other when it comes to taxation, to avoid double taxation.
So if you're earning a salary in, say, Israel, then you only have to pay US taxes on money that hasn't already been income-taxed in Israel. Therefore, whether you're paying more taxes than locals depends on whether the tax rate in the country is higher or lower than in the US. If it's higher, then you end up not having to pay anything extra.
That said, these things get tricky and there are lots of individual wrinkles. E.g. freelancers typically have to pay taxes either way here, afaik. Then again, those taxes aren't doing nothing - they're paying for you to have a US social safety net of some sort.
A couple of countries have worldwide / citizen taxation (i.e. the US). A US citizen that lives in Singapore will pay tax to both Singapore and the US. They pay tax to Singapore and can claim a tax credit on their US tax return. They can also claim the foreign earned income exclusion deduction.
I would've thought that the hassle came when the American switched to a non-American employer or ran a business outside the US. I would've thought that if the American is getting all his or her income from an American employer the hassle could be mostly avoided (even if he or she is residing outside the US) especially if the American is merely continuing to work a job he or she had while living in the US.
But maybe I am wrong.
However this may have tax consequences in your home country. I'm from the UK and if you spend more than 180(?) days abroad in a tax year you become non-resident which has some implications. You'll need to consult an accountant I guess.
I got my visa and I'm hopefully heading out towards the end of September, it should be fun.
This isn’t quite accurate. There are other tests that come into play, including whether you own a house in the UK, and how long you spent outside the UK for the rest of the year (and the preceding years).
Basically if you live in the UK, then spend 180 days (or even a whole year) outside the UK but then immediately return HMRC is not going to consider you a non-resident for that period.
It is worth paying for tax advice before you leave because the rules are complicated and there are other factors aside from just not being in the country.
https://www.gov.uk/government/publications/rdr3-statutory-re...
Also remember that tax year counts, not calendar!
It doesn’t mention being only for US citizens, it appears in principle citizens of any country are eligible. (In practice, I imagine some countries’ citizens will find it easier to get approved than others, due to differences in national security risk, likelihood of submitting refugee claims, etc.)
Don't forget Hungary, Myanmar, and Eritrea, too!
For an Australia, you pay income tax if you're a resident for taxation purposes. For an Australian Citizen to answer that they're not a resident for taxation purposes is complicated and depends in part on the type of Visa you have.
Last I looked, for me, as an Australian citizen, to not have to pay tax would mean getting a permanent Visa in another country and being resident in that country. They specifically excluded time-limited visas, even if you can get them renewed automatically.
It means travelling around the world, even for years at a time, I still need to account for my income and lodge tax returns in Australia. The one upside is getting credit for income taxes paid in another country.
I believe a similar situation also applies to Canadian citizens, as a few former Canadian colleagues in Australia had to go through a whole process of getting their Australian taxation recognised in Canada.
If you move to Barbados and just keep doing the same job you were doing in the US, then it almost certainly isn't foreign earned income.
The Foreign Earned Income Exclusion only applies to the first $107,600 you earn in 2020. You still have to pay taxes on the rest.
As an example, I moved and forgot to renew my health card. I fell in the yard and sprained my wrist. Head to a clinic, they warn me that I have to pay for the visit, but I can send the receipt to SaskHealth to get reimbursed for it when I renew my card. See the doctor, he wants to do x-rays. Go to the place next door for digital x-rays, come back, and see the doctor again. He confirms it’s just a sprain and nothing broken. Awesome. Head to the counter on my way out to pay, expecting to be out a good chunk of cash for a while. $60 total for the visit and the x-rays.
But going back to point - why would anyone get this permit when they can stay on tourist visa. I guess complacency is one reason.
So it ends up working out like residence-based taxation for most people anyway, but with more steps? Except I guess if the country has a lower tax rate than the US, then you'd need to pay the difference?
for all their faults, the IRS has extremely clear definitions and exceptions when it comes to foreign earned income and sequelae. while detailed and nuanced, there aren't really any gray areas that i have found.
It’s location is almost perfect for Americans and real estate seems cheap too. Even with cushy developer salary NZ real estate cost is way too burdensome.
Living costs in Europe are incredibly uneven, like they are in the states. Denmark is much more expensive than next door Netherlands, for example, which is actually quite reasonable (and perhaps Americans might even find it cheap outside of Amsterdam).
Note that they say cost of living excluding rent is 8% higher but that rents are lower—I don’t think their rent analysis is by area but rather by number of bedrooms. Typically rent per sq foot/meter/etc is much cheaper in the US than in European countries, and I would wager that it’s the same with Netherlands specifically.
Anyway, the Hungary part surprised me since I'm a Hungarian citizen living abroad and have never been bothered about tax. The Wikipedia table says residents of countries with tax treaties are exempt, and that should be pretty much all of them? The PDF link from Wikipedia is broken, which is normal for how the Hungarian government operates.
Does 1 yr make a difference? Or would it still be considered "vacation".
As always the devil's in the details. A 2 week vacation will incur far fewer expenses on the host state and its citizens than a 1 year stay, while probably bringing in more money. A tourist stays at hotels, rents cars, dishes out for all the tourist attractions and baubles, eats out every meal, etc. Very little competition with locals for the same resources. A quasi-local is a different story, competing from a privileged position with locals on everything but jobs. So while both visas are time limited there's no real comparison between them. The profiles of the two types of stay are very different.
The fiscal residence usually revolves around the centre of vital interests or the habitual abode. Both would be the place you live in rather than the place your employer lives.
I don't know what the details of the implementation are but I'm guessing that if this type of setup catches up it's unlikely it will always be treated as tourist-like without making life worse for the less well off residents.
I think agree with this, but I'm not sure what this looks like apart from "remote employment". How do you not compete for an in-country job without being employed remotely? Even if you're a self-employed plumber, for example, you're still competing for a job in your host country (your presence increases the supply of plumbing services without the corresponding increase in demand).
I’d be curious to hear from the people who downvoted me though.
Spain is the country I wanted to move to anyway, which Brexit destroyed my hopes of.
For anyone else that finds this potentially interesting, this seems useful:
https://balcellsgroup.com/work-remotely-from-spain/
https://balcellsgroup.com/non-lucrative-residency/
(note that they're just the first links showing up in DDG, so there might be better ones around)
The US is the only country I know of that demands income taxes from its citizens when they are non-resident. Citizens of most countries would expect to pay local income taxes only when they emigrate.
They wanted to tax me on my "worldwide" income and requested that I pay the difference between what I was making in the US vs. what I would be paying in Canada had I been living there.
It wasn't something I had considered in my planning so good to look into before you go!
It's still a little weird to me though, as someone who would expect my own country to relinquish all tax demands if I'm not actually there!
https://brighttax.com/blog/do-us-expats-pay-medicare-tax/
https://www.irs.gov/individuals/international-taxpayers/soci...
I knew someone who, through their employer, got tax advice from one of the big name accounting firms that turned out to be completely wrong - leaving them liable for tax both in the UK and in the country they had travelled to. It all got sorted out in the end but took a long time and was he was rather unhappy with the whole thing, as you can probably imagine.
"you owe/doesn't owe this because A, B, C" is the answer you should be looking for, they might give general advice but they might not know 100% about some specific situations
Note: I'm not saying "you can deal with this by yourself", I'm saying "double checking is a good idea"
Rules for temporary emigration are more complex, but if you get a job in Germany and move there, returning to the Uk occasionally to see friends and family (say 3 or 4 weeks a year) clearly you don’t need to pay tax in the Uk. Will still have to repay your student loans though - declare your income and pay the bill (which is 9% above an income that varies depending on the country you have loved to)
It might be other forms of fraud, but not sure how you come to the conclusion it’s tax fraud. The US government doesn’t care where you live, as long as you are a citizen, you have to file and pay taxes owed (which admittedly, might not be as high as they normally would be if a resident under some circumstances). It doesn’t matter if you haven’t lived in the US for decades and work for a foreign company, unless you renounce your citizenship, the IRS wants their claws in it.
I am genuinely curious. This will save me tens and thousands of dollars every year if this isn't fraud.
why the downvotes, i don't get it.
That’s an entirely different issue. Yes, New York state will likely take issue with the scenario you describe, but not at the federal level (what this thread is about). Further nobody, but you, was indicating lying about their address.
How though? You have to claim a local US address for your payroll though. right? What will that address be?
Do you have any links to information regarding Australian citizens being taxed abroad? I know for HECS, etc you're still meant to lodge and pay those amounts, but didn't realise it might be a fair bit worse than that!
It's made more difficult because tax years don't align, so it needs to be worked out that way too. Oh, and because Switzerland probably put their tax records in Swiss-Fench/Swiss-German all your documents would need to be formally translated.
I'd start by checking put the ATO site they had a bunch of tests for your residency there.
Even if the time-limit is years at a time?
> If you are working for a foreign employer who has no requirement to withhold U.S. social security, you have no obligation to remit U.S. social security taxes on your earnings and in fact, are prohibited from making such voluntary contributions to the U.S. Social Security System.
Almost every US company has it setup that you are going to be working for a foreign employer, not a US one.
"Put simply, all MPG does is tell you approximately how far your vehicle will travel based upon a single UK gallon, which equates to approximately 4.55 litres of fuel"
This particular thing, I'm aware of because there is perennial confusion over comparing mpg given that Imperial gallons are larger than American ones. If people just used L/100km....
Chauvinists go to ridiculous lengths to magnify small differences.
My point is more about how in the UK you might give a measure in one system, but then increasing the measure you might convert into a different system entirely. e.g. If you ask an Englishman how far apart you should stand for social distancing, he might say 2 meters. But if you ask him how far it is from London to Brighton, he might say it is 50 miles.
I didn't go looking for an example; it's one that I've run into a lot over the years, because people spontaneously ask why, over and over, American cars get much worse MPG than elsewhere. Not realizing the gallons are smaller.
ok i read that as 'salary paid to a US resident' , then not sure what 'US salary' means. It would be 'Barbados salary' if they are getting paid in barbados.
I understand this, obviously. You seemed to have implied that you would still be paid 'cushy us salary' in ireland, thats what i am talking about. does your current employer still pay you US salary if you live in ireland?
I would love to work for such an employer, i want to move back to my home country and still keep my US salary.
Yes, but this varies by company, and is predicated on the assumption that the move wouldn’t interfere with my job performance. E.g., I would still work my normal US hours because my job requires some amount of communication with my team.
I am really surprised that some employers are willing to go such great lengths.
how is it different?
OP is claiming an address in USA for payroll as his residence but it isn't actually his residence. How is this not fraud.
all the examples i know of like gitlab, mozilla ect adjust it to local country comp.
anyone know if such an employer actually exists in US?
What range of numbers qualify as 'cushy US salary'.
This is really absurd to classify range of numbers as 'us salary' , 'indian salary' ect.
Do you have any reasonable suspicion as to which person is making more? I think most people do.
Yes. I’ve personally seen it happen multiple times at different employers, each with unique factors.
There are way to many factors at play here to make broad assumptions that no employer does it...
- first and foremost, Covid changed everything when it comes to remote salary norms
- Duration of move (some employers would be more lenient for 6-12mo vs permanent move)
- level of seniority (which correlates somewhat with how hard it is to replace said employee if employer says no)
- how long as the employee worked for employer (another factor in how much it impacts employer if employee moves anyway and goes to work for another company)
- how bad the employer wants to retain said employee (Multiple previous emplayers, big and small, have made exceptions for specific coworkers)
- it’s important enough to mention again, Covid changed everything.
Yes you can make broad assumptions that almost no hr, payroll, legal dept of any company is setup to deal with taxes, labor laws ect across hundreds of different countries.
Yes exceptions exist.
> - it’s important enough to mention again, Covid changed everything.
No it didn't. Do you have even a single example of an employer thats allowing ppl work longterm from whichever country they please due to covid?
Yes, I do, but I’m not doing your research for you. You’ve been extremely combative and flat rude and incredulous this entire thread, so I’m stopping my participation. If you genuinely are in pursuit of knowledge and not to just pick random fights on the Internet, then I implore you to use a different approach.
I'm pretty sure the only gray area in this arrangement is "working in the US" while staying in another country on a tourist visa, but it's pretty ambiguous. I'm working for a US company and getting direct deposits to a US bank as a US citizen. If I am on a trip to another country and I sign into my company's VPN for a work-related video conference, and maybe fix some bugs, am I working illegally? Maybe, but immigration laws aren't really written with that scenario in mind.
This is a topic that frequently came up in conversations with ex-pats, since once you start doing this you'll end up meeting lots of other remote workers doing the same thing. On the one hand, you are injecting a lot of money from your home country into the local economy, which increases GDP and supports local businesses. On the other, you are using public services without paying taxes to the host country. In practice, you can't use services like universal healthcare or free education without being a legal resident, so it's debatable whether your presence is a net negative for the local economy. It's probably not legal, but like I said, the immigration laws don't take this scenario into account. I was forthright with all of the immigration officials I spoke to and all of them just kind of shrugged their shoulders and renewed my tourist visa anyway. I figured that some countries would start writing new legislation and creating new types of visas to take advantage of this scenario, and we can see this happening now.
If your question is "is this legal", the answer is "it's complicated, but probably not". If you're asking if it's possible to do this long term, the answer is yes, it's not only possible but pretty easy. I was able to do this for almost a decade with no issues whatsoever. I'm glad that some countries are starting to think about this, because I'd much rather live with confidence that my work situation is accounted for than have to wonder if my residence there is dependent on the interpretation of each individual in the immigration department.
I'll try to be better.
I did do my research but I havent found any company that,
1. Lets you move to any country
2. Adjusts your payroll to that country's address.
3. Doesn't adjust your compensation from what you were getting paid in USA.
I do know of some exceptions where people were allowed to move to a country where they already have a home office. One of my coworkers moved to Dublin and my company had a home office in Ireland. Some of my coworkers are also stuck in countries like India due to covid and HR allows them to work from there for now. But it is not any sort of company policy to let ppl work from a random country forever while maintaining their US salaries.
But the claim here is that you can move to any random country like Barbados.
claim here was that you continue to get 'cushy US salary' no matter which country and you get your payroll to the home address in that country. That sounds really hard to believe to me.