Immigration Crackdown on Digital Nomads in Chiang Mai, Thailand

As a short term tourist, you're a valuable resource. As a long term resident, you may very quickly become a net drain if you pay your tax somewhere else.

And for most people, if they live and work in Thailand most of the time, they will either not pay tax in their home country, or will pay tax proportional to the amount of time they live there, on the expectation that someone who is resident outside the country most of the time will not expend much local resources.

Laws have dealt with this kind of scenario for a very long time since it's been an issue in border areas pretty much "forever" that people try all kinds of creative methods to cut their tax costs. There's nothing particularly new here with the internet other than magnitude.

The biggest notable exception that can cause expensive double taxation is the US, since the IRS likes to get their hands on US citizens income regardless where they live, but even in that case it's ameliorated substantially for most countries via double taxation treaties.

In the Netherlands, for example, >50% of income tax is received from the 10% highest earners. So it's not unreasonable to expect a high earner to contribute accordingly.

EDIT: Heavy downvoting, but this is how things are in most Western democracies, like it or not.

If you spend $5 a day while earning $5000 a month, it's better to have one person who really loves the country and wants to stay paying income taxes, rather than 100 staying and paying VAT.

The typical government member in my experience tends to think in terms of "people will just pay more" rather than "they will go somewhere else".

EDIT: Moreover: how should a government discriminate? If you are working for a company in Norway you are probably earning better than someone working for a company in laos. If both of you are residing in vietnam, should I expect the latter to spend more in VAT than 50% of the vietnamese college graduates ?

In practice it will depend on exactly what you do, and where. E.g. I used to travel to US a lot on the visa waiver scheme, and was briefed by an expensive US immigration lawyer on how to answer immigration questions out of concern that if I were to answer the wrong thing I might get turned away even without actually ever doing anything wrong.

In the US the general rule is that if you visit without a business visa, you can not do "productive work". That is, you can go to meetings and take instructions from your employer or a client, answer e-mails (but work you may need to do to be able to answer it may in theory not be allowed), or negotiate a contract, but you can't work on a project. In practice US immigration is pretty flexible as long as you're not taking the piss or give them reasons for concerns, and never overstay. Other countries can vary substantially - some will see you as an income stream for their country, others will see you as a nuisance, and treat you accordingly.

When it comes to taxation, you should assume that yes, you have to pay local taxes unless you specifically know otherwise. In most countries there will be a time threshold and/or a matter of what work you do, and often you won't be able to stay long enough or do work that incurs taxation on the most basic business visas anyway. 3 or 6 months is a common threshold before being considered resident for tax purposes, but tax liabilities can be incurred before you're considered resident some places. In many cases there will be treaties in place that regulates which country you should be taxing to if you're ordinarily resident - or a citizen - somewhere else.

If you're a US citizen, you have the added complication that the IRS considers its jurisdiction over US citizens as global, and so you need to check the situation before you do work abroad, as the absence of a tax treaty regulating income taxes can in the worst case mean you'll get taxed twice.

And yes, our laws were written for this manner of work. People have been travelling across borders to work for centuries. There's an extensive amount of treaties and case law dedicated to handling this, and large numbers of lawyers specialising on giving advice on how to deal with this.

For tax purposes, the type of visa is irrelevant. What matter is whether the country has a tax treaty with the U.S. If you work while you're on vacation or otherwise temporarily in another country with which the US has a tax treaty, you generally shouldn't be subject to local country taxation. At the same time, however, you will remain fully subject to U.S. taxation on that income (assuming you are a U.S. citizen or permanent resident).

If you stay in another country long enough to become subject to income taxation in that country, you will continue to owe taxes to the U.S., though you should generally be able to offset some or all of those local country income taxes paid. The U.S. generally provides a roughly $100k exemption for individuals; there is no exemption for business entities.

If this is really a concern for you, you should probably talk to a lawyer or an accountant.

In fact, I have been at police checkpoints in two countries where they refused to see my passport and specifically requested that I present my driver's license - but these were both when I was driving, of course.

All anecdotal though and maybe you're right that the letter of the law does not require it. The UK certainly doesn't.

I never had an encounter with the gendarmes in the 5 years I lived there so I never found out first hand.

Edit: looks like you're right. This article does a nice job of breaking it down: http://rue89.nouvelobs.com/2011/12/26/fouilles-controles-did...