Some countries can be so frustrating with their policies governing tax payment by business owners.
Where and how to pay tax as a digital nomad?
How to pay tax as a digital nomad. As a digital nomad, having your business registered under any country, you would be expected to pay tax. Most international countries taxes are damn breathtaking.
Imagine you trying to set up something good for yourself. The country you’re setting up your business in is making things quite difficult for you. This can be so frustrating.
Let me share a story about myself on how I almost got frustrated, due to the tax policy in the country where I was running my business.
Don’t feel guilty for doing what is best
As I’m a freedom-inclined fellow, I hate it when someone pushes me to do things. I like to do things whenever I have time or feel inspired to do it. Not whenever someone wants me to, never feel guilty for doing what is best.
I believe that the only person entitled to push me or tell me about deadlines is my tax consultant. In the past years when I was living in the Netherlands
trying to grow my business there. I felt chased by so many people and authorities which made me move out of the country.
They all need something, especially when it comes to payments of all the shit I don’t need and I didn’t request. Being an entrepreneur, CEO of the company and employer is totally impossible in the Netherlands
Life is not meant to be lived in just any place, exploit other places!
The taxes were just so much on me and I got to realize that it was even more than the EU average tax. Every step forward I took as an entrepreneur. I was constantly confronted by a lot of people and bureaucrats asking me for money and telling me what to do.
I was always busy organizing these requests made by people I don’t even know. This made me lose time to build business that could be of benefit to people. I felt like I was being punished when I working really hard to put things in place.
At one point, the Netherlands
made it quite impossible for me to be who I am, and act the way I want. Due to their illogical and entrepreneur unfriendly nature. This was also one of the reasons that made me change residence for myself and my business.
As a digital nomad trying to grow your business, make sure you set out for an entrepreneur friendly area where you won’t have to pay taxes that might want to make you quit all the good stuff you’re planning to build.
Never compromise to satisfy others
Advice to digital nomads, set up your company in a country with little or no taxation, so you won’t end up paying so much tax.
It is advisable to choose a country with a low tax burden (for example Cyprus). The international community is putting more pressure on tax-free countries, which might end up having to make various concessions.
Think of flag theory every time
Another suitable method to avoid too much tax is applying the flag theory. You would live as a perpetual tourist in the country to avoid unnecessary taxes on any income earned. Flag theory doesn’t only save you money, it would also save you some precious time.
You can get a permanent residence permit in another country where foreign income is not taxed, and set your company headquarters in the country you earn more of your income.
Then you register your offshore company in the country you’re residing and receive your salary there. If you follow the flag theory, you will still pay taxes, but you won’t be burdened by any country as regards to a heavy tax payment.
Focus on your entrepreneurship dream and never let any situation hold you down.