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Comment by sergioisidoro | Hacker News Reader

Finally! The situation is getting to ridiculous levels. Yes, influx of foreign talent and investment is good, but it's an extreme situation that is out of control.

Expats were able to evade all taxes due to crypto exemption, and rules for income from foreign country companies. Locals fund social infrastructure while expats use it, dry out the housing market, and raise prices through gentrification.

Golden visas are a loophole for sanctions against Russia's aggression (at least one well known oligarch has a Portuguese golden visa), and it's ironic that you can buy a visa with 200k while refugees die in the Mediterranean trying to seek asylum and safety.

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> golden visas are a loophole for sanctions against Russia's aggression

No. Portugal doesn't accept Russian citizens for golden visa since the war started. And do not process applications started before.

> one well known oligarch has a Portuguese golden visa

No. He didn't do the golden visa. He got it in a different way. He have got it "under a law that offered naturalization to descendants of Sephardic Jews who were expelled from Portugal about 500 years ago during the inquisition". And he received it about a year before the war and the sanctions.

There's a reason why VAT is not enough and we also pay income tax to fund any country's budget and all the infrastructure. Being a digital nomad is basically a taking advantage of a bargain that is getting away with that VAT only.

Digital nomads dont pay income tax?

In most countries, I believe they should, but if they're being paid from another country, it may be relatively easy to get away with not paying income taxes -- since the country of residence would have no record of the income in the first place.

As far as I know usually you can’t get a nomad visa without proof of income.

I wonder if savings count. In that case it could work too.

This. I know a few people who work remote and just live on tourist visas in different countries. They get paid in the US and deposited in a US account. They have no bank account, ID number, nothing in the country.

It's hard to enforce.

Some do, many don't. Many don't even bother getting an appropriate work visa, at their latest port of call, there's no way they are going to be paying local taxes on that work.

Depending on their country of origin. Most western countries have rules that make income originating in other countries taxable in their home country (and then often have bilateral treaties that avoid income being taxed twice).

Quite a few digital nomads are tax frauds, though.

If someone is traveling in a tourist visa, why should they pay local taxes? They'll put money into the local economies where they're traveling just like any other tourist.

If someone is traveling on a tourist visa, they are not allowed to work in the host country.

So now they are not only potential tax evaders both in their host country and their country of origin, a crime in many countries worthy of lengthy jail sentences, but also tack a visa violation on top of it.

If I’m visiting country C and read my work email or take a work Zoom call, have I violated my tourist visa? If I check that email all 6 nights in my 7 day stay?

At some point, I think it flips from “a genuine tourist” to “an undocumented worker”, but I don’t think it’s easy to tell exactly when, especially if the actual job isn’t a local one.

If I’m on a tourist visa and taking a local job, the country’s documented workers should rightly feel cheated. If I’m on a tourist visa and brought my own job from outside the country, I’m not sure those workers have nearly as much standing to feel I’m cheating them.

> If I’m visiting country C and read my work email or take a work Zoom call, have I violated my tourist visa? If I check that email all 6 nights in my 7 day stay

I would not be surprised, but that's a question for the lawyer and the answer may vary by which country you're in under a tourist visa.

And likewise you may be owed overtime ;)

> If I’m on a tourist visa and brought my own job from outside the country, I’m not sure those workers have nearly as much standing to feel I’m cheating them.

Yeah well people are weird and not always consistent. From my point of view, people seem to care more about "immigrants taking our jobs" than they do about "foreigners staying at home and the factory was moved to where they already live" (not zero for the latter, this is just my opinion of the relative noise people seem to make).

Exactly. It's not a foreigner coming in and taking a local job. It's a tourist coming in and doing stuff on their computer.

And if they're using local housing, and paying more than locals can reasonably afford, I'd argue that's worse for locals.

Not sure why you're downvoted... It's true a lot of digital nomads wilfully ignore the law and are unintentionally committing tax fraud. I know I did when I first started 16 years ago.

Being a digital nomad does open great ways to pay very little tax but to do that legally is a more complicated process than just ignoring tax and not paying any attention to dual taxation agreements.

I'm pretty sure "many Western countries" is literally only the US

I think it depends on how one interprets the parent comment. I read it as a home/residence country taxing worldwide income, which is true for most Western countries. The US is unique in taxing worldwide income (with notable exemptions) based on citizenship, but I’m not sure that’s what “home” referred to?

> The US is unique in taxing worldwide income [..] based on citizenship

This is technically correct, but many other countries use a similar principle called the worldwide income principle, in which all your income, no matter where it is being earned, is taxable in the country they originate in / spend most of their time in (rules vary widely, I am not a tax lawyer).

You're mixing wildly different things. Regardless of where you come from, if you live in France you pay taxes in France on revenues obtained (even if they didn't originate from France). If you're a French citizen living in Canada, the French tax authority doesn't care about you.

There are a few extremely rare exceptions to that, most notably the US, which wants to tax US citizens on any income generated, regardless of where they live and where the income is from. So a US citizen living in France getting paid from a French company has to pay taxes to France (due to living there) and the US (due to being a US citizen). There are tax treaties so the taxes paid to France would be deducted from what is owed to the US.

World income principle works the same, only it thethers you based on main area of presence, not nationality.

A Turkish citizen mostly living in Germany (-> Steuerinländer), but working in France for a French company will pay German and French income taxes (and may get the French taxes back from Germany after handing in his tax forms next year).

It's the same thing, only that nationality does not matter, residence does.

Yes, which seems to be what I described in the sentence immediately preceding the one you quoted.

The US is unique in that you're always considered a tax resident.

But for example, if you live in Canada and decide to travel to a few countries for a few months at a time as a digital nomad, getting paid in those countries, then come back to Canada, you have to declare and pay tax on all that foreign income in Canada.

You need to actually break tax residency in Canada in order to stop paying taxes. And it's not easy, you need to pay all capital gains tax due as if you sold everything the day you break residency.

Usually, no, not on foreign income (with the exception that now retirees pay 10% on their pension, but it used to be 0). And even on domestic income from work, they pay only a flat tax of 20%. The income tax is normally 50.5% on income over 80k and 53% over 250k.

It depends.

Generally speaking, you don’t become a tax resident of a country unless you live there for 183 days in a given tax year. Even then, getting set up to pay taxes is a challenge, as tax departments aren’t set up to accept money from a tourist who doesn’t have any official ties to the country. It can be done, but it’s a pain.

As a digital nomad myself, I always planned to just never stay in a country longer than six months. As an American, I have the joy of paying American taxes anywhere I live in the world, which makes things extra fun.

For now, it seems systems are not streamlined to handle the burden of a high number of short term residents. Countries will adapt over time, as it seems Portugal is doing now. Some countries issuing digital nomad visas may exempt nomads from paying taxes or make it easier to pay taxes locally.

> Generally speaking, you don’t become a tax resident of a country unless you live there for 183 days in a given tax year

183 days may indeed be sufficient to automatically qualify you for tax residency, but there are other tests, if you're not careful you may (unwittingly) become tax resident in a country with a stay of less than 183 days.

Perhaps significantly less, depending on where else you've been (and for how long), and what you were doing in the year(s) before the year in question.

See - for instance - the Statutory Residence Test ( https://www.gov.uk/government/publications/rdr3-statutory-re... ) in the UK.

They call it the tour, basically you travell along the mediteranean, from AirBnB to AirBnB, working from cafes.. you are not a permanent resident in any of the countries.. :D

Depending on dual taxations agreements of their country of origin, they most likely would have to pay tax if they followed the law. There's often a clause in the different dual taxations agreement that says that describe how to determine tax residency in case the person hasn't stayed in any country more than 183 days. Usually, it's the country where that person has the "centre of vital interests" or sometimes can be determined by nationality.

Digital nomads are still too new a phenomenon that countries really properly seek to tax them but just traveling like this without being careful or creating a company in a country with low taxation is not necessarily safe.

It’s often repeated online but that won’t work as a defense in courts. It can be qualified as tax evasion, in theory any country visited during the “tour” could ask for taxes if they believe you’re trying to escape the system.

VAT and income tax are scams that tax work rather than wealth. So the wealthy pay far less than the hard-working working class.

We need wealth tax, property tax, land value tax, inheritance tax, capital gains tax, and nationalised resource industries so we wouldn't need any VAT or income tax at all.

I doubt killing the golden visa will alleviate the housing problem as it does not remove houses from the short term rental pool. The real solution would be to limit short-term rentals to some small (< 1%) portion of total stock per a neighborhood/postal code. The license for these would be given out by lottery each year. Enforce with heavy fines for operating without the license...like 30x nightly rate of the unit.

> evade all taxes due to crypto exemption

Wat.

This has been somewhat curtailed this year; right now profits from crypto assets are usually exempted from tax if held for at least a year and pay 28% otherwise. This is a much more favorable treatment than other financial assets, which normally pay 28% if held for over a year, but if held for less an year and you make around 80k can be added to your work income and pay the usual income tax rates (which is already 50.5% over 80k).

Indeed, I was never fine with them, they were always a short sighted solution to quickly get some funds via possible investments, while making things even harder for us.

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