Declarando has prepared a tax guide to clarify how they should proceed digital nomads in paying income tax, a situation that can present doubts and complications in this type of self-employed.
The proliferation of technological tools and the emergence of what is known as Gig Economy have favored the expansion of digital nomads, a type of worker – self-employed or employed – who takes advantage of their work remotely to travel around the world.
“What differentiates the digital nomad from a person who teleworks is the mobility factor: the former moves through different countries, so that he does not remain static anywhere, while the teleworker carries out his working day from home, which is always the same point ”, Marta Zaragozá, CEO of Declarando qualifies.
In this way, the mobility factor and the time that the digital nomad stays in different international destinations, will be decisive to know what taxes do you have to pay and in which country: “Digital nomads must pay IRPF or IRNR (Non-Resident Income Tax) depending on whether the country in which they have spent the most time considers them residents – therefore, IRPF taxpayers – or non-residents. In any case, these are exclusive taxes, only one of them can be paid “, highlights Zaragozá.
Where should a Spanish digital nomad pay their taxes?
Spanish legislation contemplates three criteria to consider a person to be a tax resident and, therefore, a taxpayer of personal income tax. In addition, it is only necessary meet one of the three. The criteria are as follows:
1. Staying in Spain for more than 183 days of the same calendar year
Any person who stays in the national territory for 183 days or more is considered a tax resident in the country and, as such, must pay personal income tax. This is one of the main criteria for determining whether or not a digital nomad must pay this tax.
“The criterion of permanence must be proven before the Treasury “, recalls Marta Zaragozá, so it is important that the self-employed keep track of the days they are out of Spain and have the necessary evidence to justify their absences. In this regard, for example, you can use a specific credit card in the foreign country where you are staying or submit a rental agreement or utility bills from the country where you are working.
Likewise, it is important to remember that the registration certificate does not serve to prove residence and that it is necessary to notify the Treasury of changes of residence that occur through the model 036 or 037 (030 if it is an employee).
2. Have vital interests in Spain
In the event that a person does not meet the criteria of permanence, the Treasury will attend to the second of the criteria, which is to have vital interests in Spain.
“The Treasury understands that a person has vital interests in our country when there is a spouse or minor children residing in the country ”. In this way, a worker who remains in the national territory for less than 183 days, but who has a spouse or minor children in Spain, can be considered a tax resident of the country and, therefore, will have to pay personal income tax.
3. Have economic interests in Spain
The third criterion that the public finances will monitor if neither of the previous two is met has to do with personal wealth. In this way, the Treasury considers that a worker has economic interests in the country when he concentrates his greatest amount of assets here, so if a digital nomad resides abroad for most of the year, he does not have a spouse or minor children, but has, for For example, of real estate in Spain or of a vehicle, the Treasury may consider you a tax resident and force you to pay personal income tax.
What happens if a self-employed person is considered a resident of several countries at the same time?
More or less frequently, it may happen that two different countries, in exercise of their sovereignty, claim the residence of the same person and apply two taxes that are similar. This situation is called double legal taxation and is corrected, in most cases, by what is known as double taxation agreements.
“Double taxation agreements are used to determine in which country a person resides and, therefore, where they must pay personal income tax ”. In addition, these types of agreements are used to study whether it is necessary to apply, depending on the declared income, the IRNR in the country where the person has not been considered a resident.
“The problem is complicated if one of the two countries that claim residency is Spain and the other one of the territories considered as a tax haven by our country, such as Gibraltar or Monaco. In this case, the worker must continue to pay personal income tax during the year in which the change of residence occurred and during the next three, regardless of whether he can demonstrate that he no longer resides in Spain.”, He clarifies.
Finally, Marta Zaragozá remembers that there are no double taxation agreements between all the countries of the worldTherefore, it is necessary for digital nomads to know if this type of document exists with the country where they mostly carry out their work. “In the absence of a double taxation agreement, the self-employed could be forced to pay two similar taxes in different countries”, concludes.