Tax obligations for non-residents


When someone moves to another country to work remotely, they may not be aware of the tax implications they acquire from their new country. Upon arrival, the person could be considered a non-resident, but must still comply with their tax duties. In the absence of common European legislation, each country has a different method of mitigating this situation.

How do countries tax earned income for people who are not considered fiscal residents?

Spain has created the non-resident income tax, a quarterly tax based on income earned in Spanish territory during a period of less than six months, as long as the person is not considered a fiscal Spanish resident. This tax must be declared fifteen days after the quarter ends and has a rate of between 19 and 24 percent of the income earned.

In Ireland's case, “split-year” treatment is used. If you are not a fiscal resident of Ireland, you only have to pay taxes for your income earned during your stay there.

Italy and France also tax income earned in the country even if you are not considered a fiscal resident.

To avoid paying taxes in both the country where you are considered a fiscal resident and the country in which you have worked for a period of time, there are agreements that allow you to avoid double taxation. That way, if there is currently an agreement between both countries, you will not have to pay taxes twice. Make sure you know if such an agreement exists, because they may not be present between all countries.