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What Does It Mean to Be a Digital Nomad or Location-Independent Employee?

A digital nomad or location-independent employee is someone who doesn't have a fixed tax residence in any specific country.

However, it's essential to understand the distinction between being a digital nomad and having no tax residency anywhere.

A digital nomad is someone who works remotely while traveling, but they may still be liable for taxes based on their tax residency status. Conversely, individuals with no tax residency anywhere are not obligated to pay taxes in any specific country.

Digital nomads must fulfill tax obligations in the country where they meet the residency requirements, typically by spending more than 183 days per year there or having significant economic ties, although specific rules vary by country.

If you or some of your employees are digital nomads or have no tax residency anywhere, you cannot be employees through Companio Work, and you should consider yourselves as contractors, invoicing your company every month for services.

In these scenarios, it is crucial to consult with a local tax advisor to determine their tax obligations. If they are considered tax residents in a particular country, they might need to be treated either as contractors, invoicing your company, or as proper employees.

Updated on: 15/02/2024

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