Where you sleep really isn't anyone else's business.
This whole "you can't work from $PLACE while remote, it's illegal!" thing is super overblown. Just keep your mouth shut and live your life.
Your coworkers/customers have no need to know with regards to your physical location.
Professional athletes pay taxes to every state where they play a game.
You are advocating for evasion of taxes as well as working in a country on a tourist visa. In the US that can get you as lifetime ban.
EDIT: the company you work for has to pay things like payroll taxes and unemployment to the country as well, unless you are a contractor. So the company itself is on the hook if you are working from another state/country.
The same is not true of businesspeople.
Programmers do not pay taxes to every state in which a hotel is situated in which they write a line of code.
Corporate salespeople do not pay taxes to every state that hosts a conference in which they close a deal.
CEOs do not pay taxes to every state that hosts an event at which they speak to the public and recruit a new staff member.
Perhaps the tax authorities expect them to, but in general this is simply not done, any more than your bartender is claiming their cash tips.
It is perfectly legal for tax authorities to demand taxes for EVERY ONE of your situations you mention. They usually give a certain leeway because it’s impossible to catch every instance but if you blatantly disregard the tax laws in the country where you are at, you are setting yourself up for legal troubles.
Just because you can do it because the authorities don’t pursue it doesn’t mean that you can do it. You are saying “do it because no one will catch you” is advocating for tax evasion. You can also commit murder and possibly get away with it, it doesn’t mean that you didn’t commit murder.
State income tax is not the only burden employers are expected to shoulder.
I didn’t tell anyone to do anything. Please stop claiming this, it is false.
I’ve re-read it literally six times since I posted it.
You are mistaken, and have taken your own assumptions about what I was intending to communicate or perhaps implying (such as the idea that I was referring to interstate or international travel) as literal fact about what I did actually say.
This is objectively an error.
I did not advocate nor instruct anyone to do anything.
Please read my comment again (carefully) and consider redacting your false accusation.
Your comment in case you edit or delete it:
“ It's also possible to leave your mailing address the same (I like to use a post box) and blur your background on calls and use a VPN router and simply... not tell anyone. Where you sleep really isn't anyone else's business. This whole "you can't work from $PLACE while remote, it's illegal!" thing is super overblown. Just keep your mouth shut and live your life. Your coworkers/customers have no need to know with regards to your physical location.”
From the outside, I think the original author might be implying that it isn't anyone else's business and I will comply with proper tax filings.
I live in Canada, not the USA. My understanding with the IRS is that as long as you properly file with your primary residence and pay owed taxes everything is fine. This assumes you're legal to work for the entity there.
If you work at a company that says, you must live in New York, but you move to Austin, why should the employer be able to say no to that if you're hired under a remote contract? I hear the arguments of security, customer contracts, but then you have executives who travel for work outside of even the country and continue to do work. Double standards.
Even living in another state, why is the employer a part of this conversation? I don't think employers should be apart of the conversation of knowing if an employee is eligible to work for them or not. It should be the government who provides an employee number and as long as you have a valid one the employer shouldn't be involved.
For withholding taxes, the same thing, the employer should pay to the government in reference to the employee number, government withhold and deposit with the individuals configuration.
I know the argument is on the company's liability side regarding state laws, but those should be governed where the entity and employer contract is, not the individual's location.
For example, NY state had VERY different laws and obligations when it comes to a money transfer service. If you transfer money and you aren’t registered in NY state then you obviously don’t need to obey the regulations. For example all board member of the money transfer company need to submit financial documents.
However if an employee moves to NY, then the entire company would fall under the blanket of that because the company would need to register itself in NY. This is just 1 example. Colorado has laws regarding giving pay ranges on job postings. Many jobs no longer advertise in Colorado now because of it because they don’t want to fall under that blanket.
How does NY state enforce their regulation on a company that isn't an entity in that state? If the company is not physically there with an office and has no registered entity there why do they have to comply to anything when they hire someone from that state? Would the employment contract not have a section saying that the contract will be governed by the state of the company entity located in X state (Non-NY)?
They can also issue tax warrants that can seize your out of state entity’s money from an out of state bank account.
These are commonly issued without any burden of proof and banks are legally required to obey them, so it allows any tax authority in any state to rob your account at any time without any evidence of wrongdoing.
This happened to me once; the state of Indiana whole-cloth fabricated nonexistent tax liability because I didn’t file a form with them, and stole all of the money I had in the world out of my Chase bank account in New York. I almost lost my home. Every claim they made was fictitious. Chase charged me $150 or so on top for carrying out the robbery.
Months later, after spending dozens of hours on the phone and filing many forms, I got most of the money back, less $700 or so in “collection fees” (printing and mailing letters is apparently extremely expensive in Indiana), and of course the bank fees.
Now I don’t keep money in banks.
You'll also note that the concept of "the place you reside" is somewhat of a leaky abstraction. Where do you reside if you own 12 flats in 12 different countries and spend 30 days in each of them per year?
Where do you reside if you are actually completely homeless and spend a month each in a different AirBnB living out of a suitcase in 12 different countries in a given year?
The case of having two or three homes in two or three different jurisdictions is a common one, though it usually has some convoluted rules for which qualifies as your "domicile" or "tax home".
In Europe, we have freedom of movement for goods and services, special tax status still has to exist between (for example) Denmark and Sweden, for Swedes who travel the bridge to Denmark to work. -- I believe this is called the Oresund agreement.
You must have a primary residence and you must spend 51% of your time there. Other countries in Europe do not permit working from them unless it's temporary, I believe you have 3 months to register with the local tax office.
For example, during the recent tax year I moved, my accountant filed my taxes in two states for before and after the move.
Typically, you designate the number of days in each location.
Like I said, professional athletes have to pay taxes every day that they pay a game in a state/country. That means even if a professional athlete flies in for a game, and fly out the same day, they still have to pay taxes for the one day they were physically there.
Shakira is facing tax evasion changes and jail time because of a dispute as to where she was living.
You said “it’s nobody’s business where you sleep” which is patently false. Like I said, you are advocating tax evasion by not following the tax rules of every country where you sleep at night.
The key term here is "reside". We'll get back to this in a bit.
> Professional athletes pay taxes to every state where they play a game.
You are confusing tax-at-source with residence based taxation. Which is fair enough because many countries try to do both.
For the purposes of these next few paragraphs, lets say that country X is your country of residence for tax purposes and country Y is where you happen to be performing some work temporarily.
Source-based taxation means that if you are paid from a source in country X (or the income you make has a sufficiently strong connection to country X), then you pay tax to country X on that income. Typically the tax is withheld by the payor as opposed to the payee needing to file a tax return. This is what applies to your example of professional sportspeople. There's a very clear link - you play the sport in country X, you get paid by the competition in country X and you pay some tax to country X. This income might also be taxable in your country of residence, but that's a different issue where tax treaties and paid-foreign-tax deductions come into play.
With remote work for a foreign employer getting paid into a foreign bank account where the work doesn't have much connection to the country, the link is less clear. For short stays, many countries will not consider this to be locally sourced income. See this example from the Australian Tax Office which answers this very question (https://www.ato.gov.au/General/COVID-19/Support-for-individu...). Note that in this case, you are still only paying tax on locally sourced income and not worldwide income.
Then there is the question of "tax residence". Different countries have different rules about this and residence is not "exclusive" (so you can be multiple-resident if you're unfortunate in how you set up your affairs). Tax residence in most places happens after a fixed period of stay in the country (typically 183 days) and/or if you have "residence ties" to that country. "residence ties" is typically a multi-factor balancing test, which includes things like owning real estate, supporting a spouse and dependents who continue to live in that country, having a fixed address in that country, having your essential social connections (club memberships, service subscriptions etc) run out of that country, nationality etc. Short non-successive trips to a country don't usually create residence ties. Most countries follow this model (https://en.wikipedia.org/wiki/International_taxation#Source_...). Then there's Eritrea, Hungary, Myanmar, Tajikistan, the United States for which citizenship automatically counts as tax residence, but usually there's offsetting procedures and tax treaties to avoid double taxation even if there might be double filing.
Then there's the "working on a tourist visa" question. This is unfortunately a significantly more murky area, especially when it comes to remote work. A good rule of thumb is that coming to a country for the purpose of remote work and not for the purposes permitted under a tourist visa or visa waiver is possibly over the line, but replying to some emails, attending a few meetings via call, fixing a bug here or there while you're mainly on holiday is likely to be fine. Of course the safest bet is not to do any work at all, but if we were to apply some common sense here, it would be absurd that you get an entry ban for the apparent crime of replying to an urgent email from your boss or colleague while on holiday.
Then there's the question of payroll taxes and unemployment/health insurance contributions to be paid by your employer. I don't know very much about this, but I think a starting point in the analysis would have to be whether your foreign corporate employer is subject to any sort of personal or tax jurisdiction by the country that you're in at all. Maybe someone else will fill in on this one.
Be smart, pay your taxes and don’t have that hanging over your head the rest of your life.
Many people do it but it's important to remember you're taking a risk and plan accordingly. As more people do it, authorities will prioritize trying to catch them and get better at detection and enforcement. Don't assume you won't eventually get caught, instead assume you will get caught and be resilient to it. Set things up so it won't be catastrophic or too costly if you have to suddenly relocate with no notice and also keep plenty of cash set aside to pay fines/back taxes. They key is avoiding doing things that make you easier for authorities to spot - usually financial transactions, living and travel arrangements. Also, you need to avoid doing stuff that brings any official attention your way. It's obviously best to keep relocating to another country every four to eight weeks with no more than 90 days in any country in a year but that gets tiring for many and that's when they get overconfident and slip-up.
To me, it sounds like your friend's approach wasn't very cautious. Keeping such a regular documented travel pattern and living in the same place long-term will look suspicious if your friend gets questioned by authorities, even for something completely unrelated like a loud party or traffic ticket. All it takes is one cop who's having a bad day making an extra phone call.
Obviously I assume he was following the advice of his financial professionals and reporting that income, but it could be the arrangement was hinky.
The outfit was one of the many Philips adjacent spinoff/startups that are so common in the Low Countries, so it’s possible it was either legal or they had enough political capital to not worry about enforcement on the Dutch side of things?
If you spend more than half of the year in a country, you'll usually need a very good reason if you want to avoid being fully taxable there (in some countries it's a hard rule, some look at the circumstances). Just taking a two-day trip every month looks a lot like deliberately trying to dodge taxes - such things can easily lead to criminal charges.
This does sound like short-term contract work where they didn't want to work through the channels (time constraints) so chose the most expensive way to do it.