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Did you know that choosing your tax residence correctly can save you up to 50% in taxes per year? In a world where working from anywhere is becoming increasingly common, understanding taxation for digital nomads and expatriates is essential to protect your income and avoid penalties.
In 2025, tax laws have quickly adapted to the reality of international remote work. Governments have increased controls, tax treaties have gained prominence, and there are more and more incentives to attract global talent. In this guide, you will find everything you need to know about taxes, tax residence, and legal obligations if you work from abroad.
What is taxation for digital nomads and expats?
Taxation for digital nomads and expats is the legal framework that regulates how, where, and how much you must pay in taxes when you work and reside outside your country of origin. It covers taxes such as income tax, social security contributions, and local taxes that vary from country to country.
In 2025, this framework has become stricter due to the advancement of digitalization and the automatic exchange of tax information between administrations. This means that even if you work remotely, your data may be shared between countries to ensure that you comply with your tax obligations.
Tax differences between a digital nomad and an expatriate
- Digital nomad: Works remotely for clients or companies, without a fixed contract in the country where they are temporarily residing. Their tax status will depend on the length of their stay and the existence of double taxation agreements.
- Expatriate: Moves to another country under an employment contract, usually for a company, with clear tax residence in the destination country.
Understanding this difference is key, as tax obligations and benefits change radically between the two cases.
How your country determines your tax residence
In most jurisdictions, a person is considered a tax resident if they spend more than a certain period of time in the country or have their center of economic and vital interests there. Spain, for example, uses the 183-day rule, but also considers whether you have your habitual residence or family there.
Other countries apply additional criteria, such as registration in local censuses or property ownership.
How do you know if you are a tax resident in a country?
Being considered a tax resident in a country means declaring your income there and complying with local laws. This status does not depend solely on where you work, but on factors such as the time you spend in the country, your usual place of residence, your family unit, and your investments.
Failure to correctly determine your tax residence can lead to problems such as double taxation or penalties for non-compliance. Therefore, before settling in a country, it is advisable to review its legislation and, if necessary, obtain an official certificate.
183-day rule and other international criteria
The most common rule for establishing tax residence is spending more than 183 days in a calendar year in a country. However, there are additional criteria:
- The location of your usual place of residence.
- Location of your dependent relatives.
- Main center of economic activities.
Tax residence certificate: when and how to obtain it
This document, issued by the tax authority of the country where you reside, certifies your tax status and avoids problems with other administrations. It is normally requested through the local tax agency and is essential for applying double taxation agreements.
Countries with agreements to avoid double taxation
Spain, France, Germany, Portugal, the United Kingdom, and most OECD countries have bilateral agreements to prevent the same income from being taxed twice. These agreements establish where certain taxes must be paid and under what conditions.
Most common taxes for digital nomads and expatriates
Working abroad does not mean you are exempt from taxes. In 2025, the main tax burdens to consider are income tax, social security contributions and, in some cases, local taxes such as VAT or municipal taxes.
The impact of each tax will depend on your tax status, the type of income and the existence of international agreements between countries.
Income tax (IRPF) and special regimes such as the Beckham regime
IRPF is the main tax on personal income. In Spain, for example, there is the Beckham regime to attract foreign talent, which allows them to be taxed at a fixed rate of 24% up to an income limit for a certain period.
Social security and international contributions
If you work for a foreign company or are self-employed, you may have to pay contributions in your country of residence or maintain your affiliation with your home country’s system through bilateral agreements. Choosing the right option can avoid double payments.
Other taxes: VAT, municipal taxes, and local fees
Some countries apply VAT to digital services even when the customer is in another country. In addition, there may be local property taxes, business licenses, or tourist taxes if you rent your home to third parties.
Taxation in popular destinations for digital nomads
In 2025, several countries have designed specific tax regimes to attract remote workers. Choosing the right destination can mean considerable savings and better living conditions.
Spain and the special regime for remote workers
Spain offers a digital nomad visa that allows you to reside and pay taxes under advantageous conditions, paying less tax if you have not been a tax resident in the last five years.
Portugal and the Non-Habitual Resident (NHR) regime
Portugal maintains its famous NHR, which allows reduced tax rates for 10 years in certain professions and exemptions for foreign income under certain conditions.
Andorra, Dubai, and other attractive tax havens
Andorra offers maximum income taxes of 10%, Dubai does not tax personal income, and other countries such as the Bahamas and the Cayman Islands offer total exemptions, although with stricter residency requirements.
Tax obligations if you work for a foreign company
In 2025, more and more people will be working for companies in other countries. This entails clear obligations: declaring income, paying social security contributions and, in some cases, paying taxes in two jurisdictions if there is no agreement.
Taxation of international teleworking
It will depend on where you do the work and your contract. Some countries tax by source of income and others by tax residence.
Declaring income in your country of residence
Even if your employer is abroad, you will normally have to declare this income in your country of residence.
Frequently asked questions about taxation for digital nomads and expatriates
This section compiles real questions received by tax advisors in 2025, with answers adapted to current legislation.
How is a digital nomad taxed in Spain?
If you spend more than 183 days a year in Spain or your center of economic interests is there, you will be a tax resident and will be taxed on your worldwide income, unless you apply for a special regime.
Can I work for a foreign company without paying taxes in my country?
No. Even if you are paid from abroad, if you are a tax resident, you must declare that income.
Which countries do not tax digital nomads?
Some, such as Dubai, the Bahamas, and the Cayman Islands, although they usually require investment or actual residence.
How can I legally avoid double taxation?
By applying agreements, deductions, and exemptions, and by submitting documentation proving your tax residence.
