Digital Nomad Tax Planning

Digital Nomad Tax – Where Do I File?

We are digital nomads – where do we file taxes?

As digital nomads, we love to travel. Sometimes we are out of our home country for years, and may not even be legally resident in the other countries we travel through. Because, when we are on a tourist Visa we are no resident, under the legal definition. We are location-independent workers who provide services online (as freelancers), run Amazon FBA or dropshipping businesses, create innovative content, and provide Internet marketing expertise. Do we have to file a tax return anywhere? And if so, where?

The answer depends largely on your citizenship, and the treaties that your home country has signed with other countries. If you are a US citizen, you must file a tax return on your worldwide income, which can then be mitigated by tax you pay in another jurisdiction in which you are resident, according to the US law and treaties etc. As you are a digital nomad, however, there are plenty of deductions that you can take advantage of to reduce your tax obligation. Keep the receipts from those travel expenses!

If you are a citizen of other countries, like Canada, your residency determines your tax obligation and who it is paid to. If you are resident of another country for the tax year, then you do not need to file a tax return in Canada if a treaty covers it. Depending on where the residency is, you may be liable for no tax at all, since some jurisdictions only tax income made within the country, not externally (like a digital nomad!)

Please contact us for answers to your specific tax situation and let us help you reduce your taxes. You may be paying more tax than necessary if you are filing in your home country every year. We have a network of international tax associates who can advise on the tax law of international locations, so you can understand if and where you need to file returns.

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