- People's attempts to hide their remote lifestyle are mostly laughable. You don't need sophisticated tooling to know that someone isn't where they say. I see you every day. I can recognize patterns. I can see the changes in work hours, response times and just general behavior. I can tell when you have just rolled out of bed with a coffee or come back from the club.
- Most managers I know don't give a shit. In fact we'd rather not know at all. It's really HR you have to worry about (and I'm not going to tell them unless you give me a reason to).
- HR itself only cares because of the tax implications. Inter-state taxes are bad enough, figuring out international ones are basically impossible. The company can get into major trouble if they are not following local employment laws, and "I didn't know my employee lived there" isn't a good enough defense.
- For those saying "IRS will come after you", these remote employees are paying full federal, state (mostly CA), payroll and various local taxes while using none of the benefits. The government is probably ecstatic that such people exist.
- The government on the other side is the one you really have to worry about. Locals in Mexico City, all over South America, Bali, Thailand, Vietnam and really all over the world are pissed with these "digital nomads" (read: illegal immigrants) who work on tourist visas and upend the local economy while paying no taxes. It's only a matter of time before they all start cracking down.
> Locals [...] are pissed with these "digital nomads" (read: illegal immigrants) who upend the local economy and pay no taxes
Wait, aren't digital nomads literally bringing money in from another country? They pay taxes on everything they consume, yet they don't take the money from inside the country, they bring it in from the outside.
Not all jurisdictions have sales taxes. And sales taxes aren't anywhere close to covering 100% of the budget for a city/state/country.
That foreign money mostly goes to a handful of landlords/Airbnbs and tourist-friendly businesses (which are often foreign owned themselves). That in turn drives up prices of everything for locals – who are seeing no increase in income and moreover have to pay income tax and a ton of other taxes on it, something that digital nomads conveniently skip.
An influx of foreigners and foreign money isn't automatically welcome in a local economy.
For most purposes, a foreign tech worker is a lot like having an extra tourist on any given week. They are giving money to your local businesses, but aren't competing with locals on anything but housing. The locals are going to see an increase in income in the very same way that they do in tourist towns: Extra demand for goods and services will provide more jobs and quite possibly marginally higher wages.
Take a random tourist town: Say, in the southern coast of Spain. Then tell them that finally, they had managed to get rid of all the tourists, forever. Is that good or bad for the town? It's not as if there are no externalities, but in general, tourism is going to be good for your economy, and the amount of extra taxes the tourist pays on lodging is pretty low. Which Caribbean islands do better, those that have a lot of tourists, or those that don't take any external money?
Also consider what happens in the opposite side of the remote worker, where what you get is the equivalent of a foreign worker who comes in, pays taxes, but spends basically nothing, and spends all their salary in remittances, to be spent abroad by their family. The worker is competing with you for the job, but then doesn't spend it locally! You will not find many municipalities that are all that happy of having a lot of jobs formerly done by locals in offices suddenly done by someone that is far away.
You are assuming that all tourism is a net positive for any region, which itself is a faulty premise. In a lot of cases unchecked tourism, immigration and foreign money only increases the income divide among locals and contributes to inflation and gentrification.
Not all these foreigners are living in tourist towns. They aren't staying for a week or two, but months at a time. They aren't staying in hotels meant for tourists, but rather competing with locals for apartments (a lot of them having turned into Airbnbs because of it).
This is the primary reason housing is in crisis in the US. Tech workers and foreigners finding cheap but gentrifiable places and driving up the price of housing to the point no one can afford it but them.
While OP is right in that these people are a net good for the economy at large there's a reason a LOT of countries do not allow foreigners to own property. The US is one of the few places where you can without much trouble. You can see the problem this causes with states adjacent to California, like Nevada, where the average house is now over 10x the average income thanks to the tech emigration.
Still blatlantly ignoring the majority of people who are not wealthy enough to profit from tourism, but only get the downsides of it, which I'm not going to list here as they are many and proven.
Edit: No, more potential careers as an underpaid waiter or touristic guide is not an upside.
> is a lot like having an extra tourist on any given week
And as OP explained in the comment you're replying to, tourism is not necessarily a positive for the locals:
> That foreign money mostly goes to a handful of landlords/Airbnbs and tourist-friendly businesses (which are often foreign owned themselves). That in turn drives up prices of everything for locals – who are seeing no increase in income and moreover have to pay income tax and a ton of other taxes on it, something that digital nomads conveniently skip.
It doesn't really matter if you're a digital nomad or a classic tourist, the same downsides apply, but in the case of digital nomads they're even working while being on a tourist visa. They should pay taxes to the local administration but they don't, so that makes them a double problem.
In most popular tourist destination there is a special tourist tax, paid at the hotel reception desk. Sometimes it is included into hotel rate and visible only in a detailed bill.
Maybe it's time for governments to stop relying on income taxes so much, and instead really on land/property taxes for the bulk of their revenue. Sales taxes are regressive, but there are ways to keep them from hurting lower income folks as much.
It is very hard to collect personal income tax in developing countries. OP's tax revenue claim just doesn't match the data. On the other hand, corporate tax and VAT are very easy to collect. Digital nomads are very good for these revenue streams.
It is true these digital nomads don't contribute to social security benefits. But they also rarely take from it. So it is a mixed bag.
Property taxes are extremely regressive. Probably the first or second most regressive tax you can conceive.
I, a lowly middle class worker buy a house in Cheapville. I can afford it, and the property tax, so I am happy. 20 years later I own my house and hundreds of thousands of immigrants from TechVille come buy up all the property. Great! There's no houses really on the market so the value sky rockets! Problem... my house value goes up, but so does my property tax. In fact, it's so expensive now I can no longer afford to live in the house. I have to sell MY PROPERTY because the STATE has imposed a tax specifically designed to destroy the idea of property as an owned right. In some circles this would be considered theft-by-taxation which is probably the only correct interpretation of this scenario. My house has to be sold because I can't afford it, it's bought (read: stolen) by some rich tech bozo with more money than sense, and I have to move. Probably to a different state where then I contribute to the very same problem there. The problem is the regressive property tax enabled this. The only solution is to not have them for residential non-commercial property. If property is not producing tangible value it should not be taxed. Taxes are collected at the sale of the home - this is enough. If it isn't, congress needs to tighten the purse strings.
Property taxes are regressive, prevent you from ever truly owning your own plot, and disproportionately reduce the wealth of the people who spend most of their lives creating it for other people. They are probably the most distilled form of evil the financiers of a state or country can create because they are totally unavoidable and because of the way percentages and property value are calculated can very quickly go way out of hand. The only people that benefit are the rich house flippers and people with so much money their property taxes are a rounding error. It puts property in only the hands of the wealthiest. How is this a good thing?
> Property taxes are regressive, prevent you from ever truly owning your own plot, and disproportionately reduce the wealth of the people who spend most of their lives creating it for other people.
Property taxes are a form of wealth tax. The more wealth you own in the form of property, the more you pay in tax. Many people who work for a living don't own any property at all - about 35% of households in the US are renters. They don't have this problem of "wow my house is worth $1.2 million so I've got to sell it and move" - they've got bigger problems.
Really? I thought the purpose was to create a new landed gentry, with hereditary title to land.
200 years from now, your descendants can pay their annual peppercorn to the state each year (after inflation and the statutory maximum annual increase have their expected effect) while the plebs toil in labor to pay you rent.
It really is such a shame that the founders of our country were so short-sighted that they explicitly prohibited that in the constitution. Maybe we should think about amending that.
It won't move, but the utilization will change to be minimize the cost.
I suspect that will be a net negative for anyone who needs to rent because they cannot afford a mortgage, maintenance cost, insurance, contribution to shared infrastructure like plumbing and electrical, and taxes together.
I considered renting an apartment in two different commune-owned buildings (I was a student, not looking to own). Both were just as expensive and in significantly worse condition than all of the neighboring housing options. I found w nice place, but would have been better off with a slumlord rent-seeker than either of those places.
> It won't move, but the utilization will change to be minimize the cost.
Yes people will build more medium density housing instead of having zucchini gardens in one of the most expensive regions of the world. Higher density would be good for renters in the local area.
Moved to New Hampshire lately and I love it. No state income tax, no sales tax. Property tax is a little bit higher than where I used to live but on the whole I worked out that I still save $10k in a typical year in tax burden compared to the same value property there, not even considering the lower COL in other areas. Working from home in a quiet peaceful hobby farm in a cheap state is living the life.
I cannot get behind a property tax - if you own and have paid off a house, the idea that the state could seize it is abhorrent. Tax transport, wealth, sales - almost anything else in preference to property. Housing is a primary need.
The reality is that to own property you need a means to enforce that ownership. That places a constant forever cost burden on the community at large. You need police to enforce against trespassing, you need a legal system to process and transfer titles of ownership, you need infrastructure that is in part supported by public funds, you need an army to defend against hostile takeovers from foreign powers. This notion that you can own a property and end all ties to your community is ludicrous.
Taxes are completely justifiable to allow you to have these means to enforce your ownership rights.
I'm not anti-tax, I'm anti-property-tax. You could cover community burdens through infrastructure tax, transport tax, real estate sales tax, etc, and even ultimately a wealth tax.
The issue with those taxes are that they are avoidable and then a property owner has found a way to not pay for the upkeep costs of their property again. The most straightforward way to ensure property owners are paying those costs is to apply the tax burden to the property itself and confiscate the property when it's not paid. It ensures timely payment of taxes.
Where you and I would agree is on the assessment methodology which is in most jurisdictions a money grab since it's usually always based on the market value of the property and not on the costs to provide necessary gov services.
> The issue with those taxes are that they are avoidable and then a property owner has found a way to not pay for the upkeep costs of their property again.
100% true that a physical property is not exactly going anywhere, and so it's extremely convenient to use as a stand-in for wealth / ability to pay taxes. That said, this could be worked around if governments were incented to do so, given that finance is almost entirely electronic at this point; offshore banking could be reined in, for example. There will always be loopholes and ways to avoid a tax burden, but if the (financial) penalties are commensurate to the dodge, then there's a reasonable disincentive.
What about land? Is it ok for someone to own a communal resource? Are property taxes a way of paying the community back for the exclusive use of a piece of land?
> Is it ok for someone to own a communal resource?
If there is zoning (and well managed conservation), I don't have a problem with it. I've lived near areas with no zooning at all, and that's a race to the bottom.
You could have 99 year leases or similar instead of ownership (Japan does this?), but that is unfair to e.g. grandchildren who inherit a farm which they've worked hard at all their lives (where land is essentially their means of income.)
Yes there is less land to go around, but that problem is ultimately overpopulation, and that's an _entirely_ different topic.
and even then, a digital nomad's expenditure inside their country _is income_ to the next hop. They're simply losing on a single hop in an infinite chain of taxation.
soo... you want those that ammount to tourists to pay taxes in the country they visit? By your logic I should pay taxes to the country I go on holiday on the paycheck I get while being there.
You are forgetting the tax income from the money all those "tourists" spend in that country. Who do you think benefits from those taxes?
I do agree with you that it can befome a problem if those "tourists" start buying properties in those places. That should not be alowed without permanent residence (of, at least, a few years).
"That in turn drives up prices of everything for locals "===> Are you serious? Do you realise how many of these "tourists" (% wise) are needed to affect the market in a city? Even 1% is nothing more than a blip(IMHO).
> By your logic I should pay taxes to the country I go on holiday on the paycheck I get while being there.
No, because when your are on holiday it is not your place of employment.
All they want is if you are using somewhere as your place of employment, that you pay taxes that are due on earning that money in the country, the same as if your are employed locally. It's not unreasonable.
> Who do you think benefits from those taxes?
You can't pick and choose which taxes you want to pay and then say there is some 'benefit' for deigning to pay any at all.
Next time you stay in a hotel, try saying "I've shouldn't have to pay my bill, you should be grateful enough for the 'benefit' of the money I spent in the bar because I was staying here", and see how that works out.
This isn't about being a legitimate tourist though. That has always been allowed. There are not many jurisdictions around the world where you are allowed to work and not pay any taxes though. Just because there is a loophole where you _can_ work remotely and it's extremely hard to detect or enforce doesn't suddenly make it legal, you are simply violating the terms of your Visitor's visa.
Would income taxes from digital nomads make housing prices go down? There would be more money going to those governments but it's unclear that those governments could help offset most of the increase in costs.
No because they increase demand for housing while supply is fixed, and then have much more money than locals to get whatever housing they want. This is what happened in SF for example as techies invaded and displaced the non-tech middle and lower classes.
The same reason many cities that are now overcrowded are pissed at all the rich people that moved in and bought everything up.
If one or two digital nomads move in, the locals won't care much and the nomads will just become one of the types of people they have.
But if a town becomes infested with them, it can cause all sorts of issues (the nomads won't care about food prices because they can afford US prices, which are 10-100x what the locals have been paying, so prices can suddenly skyrocket).
Tourism has done similar things to cities around the world; turning what used to be actual functioning cities into amusement parks for adults. Venice might be a good example, some say.
Reminds me of one of my buddies who decided to move out of California after going permanent remote. He encountered more than one realtor who informed him that the seller intends to charge a "Californian Tax" percentage on top of the asking price to any buyer from California because they just don't want us in their communities. Talk about cutting off your nose to spite your face.
Passing up money in the short term for the perceived good of your community can't be fairly equated to "cutting off your nose to spite your face". But it would be more fair for the seller to try to get to know the buyer and go from there instead of just assuming by state.
> Wait, aren't digital nomads literally bringing money in from another country?
I used to make the same argument, but it's just so convenient when it's easy to forget that there is a reason why income tax exists on top of VAT in the first place. And that's because VAT doesn't cover all of the budget expenses.
So you pay your hefty income tax back home, and only pay VAT on the products and services provided by (private) entities. The proportion of the budget not covered by VAT is covered by the locals and their income tax. That's not OK.
Same reason why the most touristy places impose additional tourist tax.
Citizens working without paying into pension, healthcare, or following local employment laws (best example: France, that really cares what employees in their borders do).
You can't simply unilaterally declare that sales tax compensates for everything you do, and think laws don't apply.
They would still be using a lot of city/state/country local infrastructures (utilities, roads, parks, emergency medical/police/fire services, local libraries, to name a few), won't they? Costs for these might not be funded by Sales Taxes alone or at all. Not paying one's dues to the City/State/Country of residence in accordance with local laws is not only illegal, but also immoral; it breaks revenue calculations city/state/country makes based on multitude of things (at least in most sane places), and if a nomad is not doing not paying equal share, then the locals are footing the bill for them!
Mere income tax on landlord's rental income is not something that will come close at covering all the income gaps city/state would face if one were authorized local worker.
As someone else pointed out, these nomads are earning in foreign currency that literally translate to 10x-100x in local currencies, they will simply drive the prices up and soon drive them up enough out of reach of the locals simply because nomads can afford inflated prices.
Roads, parks, and libraries are pocket change compared to pensions and healthcare in any developed nation. In the UK you might be able to skate on the NHS, but someplace like France actually has a free-market healthcare system backstopped by insurance. That leaves pensions, and if you’re not a contributing citizen, you’re not getting paid out of it either.
and who is receiving these 10-100x'd prices? The locals who are providing value to the purchaser. Higher selling prices are profits in some locals' pocket/bank account. Why does this side of the equation never get talked about?
Yes I may make the price of a taco go up 20c, but that's 20c more profit for every taco sold at that price. The workers, the business, the real estate value, the whole supply chain can all now command a better price because of my "wasteful" spending relative to the context.
That is assuming the (much debunked) trickle down economics. A 20c increase in taco price is not going mean an increase in the worker's pay (if any at all). Minimum wages haven't increased (much) in the States for over a decade, in spite of record profits for a lot of these minimum wage employers. Sure, the price increase is going to help with wealth accumulation for some, but certainly not all, and the ones left out will feel the sting. Someone on a pension will see a sudden increase in prices, property taxes etc. something she didn't have enough buffer to accommodate. Of course, there are other forces that will do the same too, but it would be foolhardy to ignore the effects of digital nomads on local economy. Better to get ahead of it in terms of public policy before it becomes too big of an issue. Same way governments around the world are struggling to curb inflation, nomads can cause (unexpected) inflation on local economies.
The same can be said about illegal immigrants and temporary visa holders in the United States. An H1B worker pays taxes, pays into social security, etc, but isn't going to get a penny back out of it.
And yet, for some reason, a lot of people really dislike[1] H1Bs...
[1] Last election cycle, I've received a beautiful election pamphlet from a frothing-at-the-mouth state politician-want-to-be who spent most of his 250 words assuring me that H1Bs are robbing the country by mooching all of its services while not paying any taxes. He, uh, got 40% of the vote.
There's a glaring difference between a digital nomad working remotely and someone on an H1B or an illegal immigrant - the digital nomad isn't participating in the local labour market. Increasing the labour supply (which most assume would decrease the price) is the major complaint people who dislike H1Bs/illegal immigrants. A digital nomad isn't competing with the people he lives near for scarce jobs, so that complaint doesn't apply.
This is the typical communist/labour style answer which ignores that todays mobile work force is not just a body in a geography. An employee past about 5 years experience is essentially unique when observed across the many variables (education, years of experience with each specific tool, industry/domain experience, soft skills etc). Just because a capable expat employee happens to presently be located in Costa Rica, doesnt mean a capable Costa Rican can be found. The most valuable people in the workforce are not cogs.
There's no reason it couldn't be employing a local, but there are an awful lot of reasons it wouldn't. No locals applying chief among them. If the company was explicitly not hiring anyone from Costa Rica, sure, that would be one thing. If the best candidate happened to not be Costa Rican, that's something else entirely.
This is again something you can't just unilaterally declare.
Even if you're right that they're not a burden, which I disagree with since they do actually do enjoy services like police, fire department, mass transit subsidies, national defence, roads, clean air enforcement, etc, this is still not something you can unilaterally decide.
The laws are there whether you think they should be or not.
The country's state budget and its rules are not up to the individual to opt in and out of.
That they have wealth outsized compared to the local economy could have distortionary effects.
One of the biggest examples would be in real estate, where foreigners could be comparatively very wealthy compared to locals, and can thus out compete locals and dramatically raise the price of real estate.
This is why some jurisdictions that found that the amount of properties being purchased by foreigners was becoming startling have brought in foreign buyer taxes to try to even out the distortions in the economy and make it more fair for those who earn their incomes in the local economy.
I was reading about this in Vancouver and Toronto. From what I read, the foreign buyer taxes did indeed massively decrease foreign real estate investment, but it's not at all clear that it actually lowered home prices, or even slowed down home price growth. Not what I expected or hoped to see (as I live in SF and would advocate for something similar here if it worked).
I'd say that's true. The reasons being that the housing economy is an enormously complex system and so while addressing certain problems fixed those problems, there still remained others which still continued to induce high prices.
(using Vancouver as an example, after the foreign buyer tax the city still has an incredibly low near 0% rental vacancy, which makes secondary home investment enormously profitable and continues to keep prices lofty)
This doesn't mean that it wasn't a good idea to address the foreign buyer problem, but it was clear that the system instantly shifted to compensate for the lack of foreign buyers, and new buyers appeared. There was plenty of local buyers, many of which had existing properties with inflated land values they could borrow against and the ultra low interest rates from the pandemic that aided them in bidding up properties to buy. Good for local buyers to have less foreign competition, no real change for local renters.
The most real direct outcome of the foreign buyer tax was the nature of the housing product that was made changed. Previously there were companies that were building "luxury" condos explicitly marketed as pied a terres to a foreign audience (largely from major cities in asia). Overnight this sort of thing went away and the same companies that were previously pushing these products instantly pivoted into building purpose built rental buildings for locals.
Ultimately I think the foreign buyer tax is good for local renters, but further work needs to be done.
It didn't lower housing prices because foreign buyers were single digit percentage of all transactions. Canadian real estate is mostly propped up by Canadian buyers buying multiple properties by leveraging existing equity.
It's not unusual for someone to use their HELOC to buy and 2nd or 3rd property and rent it out.
Of course with rising interest rates (and mostly variable mortgages) that's all coming home to roost now, al la USA in 2008.
If you spread the area widely enough (ie. entirely of Metro Van) yea it was single digits, but if you looked at a narrower amount of municipalities and neighbourhoods (ie. where there were new builds, burnaby and richmond) there were places where it was high teens closer to 20% than 10%. This is why the government ended up acting.
The fact that there was significant amounts of foreign buying is not in contention. You can google Globe and Mail articles from ~2016 that cite these figures.
> Wait, aren't digital nomads literally bringing money in from another country? They pay taxes on everything they consume, yet they don't take the money from inside the country, they bring it in from the outside.
Not quite. They do bring money by buying things and paying sales/VAT tax. However, they don't pay income taxes because in 99/100 times they are not allowed to work, so they are illegal immigrants essentially.
They also come with their LA salaries and make renting/buying harder for locals.
I know people who do that in Thailand on tourist visa, and just have a short vacation every 90 days to qualify for new tourist visa.
I think the point is you are breaking the law. Most sensible people wouldn't care. Its if you get an over zealous customs official, tax hound or local police. If you keep you nose clean you're probably OK but if you get in a fight or piss of the mayor you might get extra tax fines or jail time.
A country's borders are not only protected by paying taxes that are due. It's illegal in most places, save a regulation in place to protect that case, to work from another country without proper papers, read a visa, permanent residency or citizenship.
It goes back to the 'government is not a monolithic entity'. Local tax authorities have no problem with it and likely encourage it ( more money flowing around for just about everything ), but there are always beancounters at the top, who think they may be able to extract even more.
>Locals in Mexico City, all over South America, Bali, Thailand, Vietnam and really all over the world are pissed with these "digital nomads" (read: illegal immigrants)
While it may be the case in other countries, Mexico has fairly straightforward laws that allow you to work remotely for up to 4 years without paying local income taxes. Basically, as long as you have a stable job outside the country, you are fine.
The mood among some Mexicans may be negative, but for the most part Mexicans understand (thanks to a long experience with tourism) that foreigners bring in the big bucks. And this is good for us.
I'm not sure you are correct about the countries the digital nomads are flocking to being pissed about them. Maybe a few locals, but, the government of Costa Rica is encouraging digital nomads because it brings money into the country because these nomads are dining at local restaurants, shopping at local stores, hiring people to clean their house, paying rent etc.. When the average salary in 10k a year in these countries a digital nomad is easily spending enough to create at least one, if not multiple jobs for a local.
I write software for pay. That's it. I don't see my employer as a boss - they are a customer. If they aren't happy with the product, they can find someone else and I can respond to the other 50 LinkedIn requests...
As a contractor you are free to incorporate wherever you want.
I wouldn't work from e.g. Iran, or you could get sued to death when your customer is indicted for violating US sanctions, but yeah why would your employer care?
Oh, because maybe they have various insurance and partner contracts that speak about your physical location.
If your contract doesn't say where you are, then work from anywhere, and follow whatever laws.
If your contract does say where you are, then violate the contract an your own risk.
Mexico is starting to get a lot stricter on FMMs and IMF agents are getting reticent to issue them for maximum term like they used to. I'm told this is a result of IMF getting really frustrated by the number of people who are repeatedly taking out 180 day FMMs with only token returns to the US to avoid getting permanent residence - which is not very difficult but means the tax collector knows you're there!
Sorry, FMM is the forma migratoria multiplé, it's the usual paperwork for entering Mexico for any short-term reason, if you're an American (and I think some other nearby countries). It's not really a visa as those aren't required for Americans, just a form they use to track guests and mostly to collect a fee/fax for stays longer than 7 days. IMF is my own fault, I meant instituto migración federal, but that's not actually what it's called - it's the INM, instituto nacional de migración. I think I was mixing up like three different names in my head.
Mexico is really very lax about what you are allowed to do while in Mexico on an FMM and the fee for one isn't very much at all. But what you can't do is stay past the departure date on the FMM which cannot be more than 180 days from when it was issued. INM agents used to be very willing to just put the full 180 days on every FMM but lately are asking questions about your return plans and only giving you shorter time periods. Apparently there were a lot of people who were living in Mexico and basically going to San Diego at the end of their FMM, staying a few days, and then reentering on a 180 day FMM to return to where they live. This has always been against the rules but I don't think INM really cared that much until recently, because the number of people doing it increased greatly.
I am sorry, but what is the problem? So somebody already pays crazy taxes in their home country, then pays rent in another country (including taxes), sales taxes and likely spends much more than locals in the foreign economy. The foreign taxman gets a wind of possible more money, starts taxing those folks on top of what they already pay and they just move out, spread the word, weakening the economy further. If they overstay 180 days or whatever is needed for a tax domicile then yeah, they should pay taxes there, but with the current tax regimes that might not be technically possible. What prevents folks to stay 179 days in Mexico and 179 days in Costa Rica?
' What prevents folks to stay 179 days in Mexico and 179 days in Costa Rica?'
costa rica visa is 90 days maximum for starters
'expats' are very entitled; they want all the conveniences of a 'third world country' (they will call it 'shithole' when their n-th consecutive entry is denied) they want all the cheap rent;services;food ; they want to use the roads; sidewalks; beaches; national parks; police; emergency services but god forbid you ask them to pay income taxes as a local if they are going to work from their host country ' it is preposterous; i already paid 10% vat on my 2 dollar frapuccino'
In my state, counties also assess income tax. The largest city has lower tax levels for people who work in the city but live elsewhere.
Our payroll app needs to know what days you are working from home. This way, if you work in one county and live in another, the county you live in will get their share of the income tax.
I think this is going to be a huge problem in a year or 2 when cities & counties see a large drop in income and try to figure out how to "fix" it.
The biggest risk is the remote country coming after the employee and/or employer. If you are the employer, and you are 100% sure you are never going to do business in the country, you MAY be ok. However, there are tax treaties at play as well and that can complicate things.
If the remote country goes after the employee, it may get ugly especially if the employee is still there. That indirectly also impacts the employer.
So if you or your employees are going to work from a different country, read their regulations and be very careful about staying longer than the time period that they consider you a resident for tax purposes.
This is quite an interesting space for some future startup.
wait until your rent and other prices drive up by influx of abnormal salaries for the local economy and everything becomes ultra-expensive for you. Barcelona, Mexico City, ...
Are those people planning to all stay on the same place? South America is quite big.
Anyway, I'm not sure rent is high on those place (or rater specifically Mexico City) because of immigration. I can't imagine deciding to move to Mexico and picking specifically Mexico City instead of somewhere else (it would be like deciding to go to Brazil and insisting on living in São Paulo - people have many reasons for living there, remote working immigrants have almost none). At the same time, there are plenty of reasons to have expensive rents there that don't depend on immigrants.
Are the governments really that upset with illegal immigrants that (typically) don't commit crimes (aside from immigration/taxes) and spend (by local standards) crazy amounts of money in the local economy?
It's not just that. In policy making, being lax about a particular thing for a particular group (in this case, border control) opens up a pandora box of problems by legitimizing that very thing for everyone else.
no, not really, unless it is politically expedient for them to appear to care. most politicians view themselves much closer to the digital nomads in terms of class/social status as opposed to their constituents / regular folk, ex. politicians already mostly live in gentrified/fancier areas, dine at the higher end restaurants, and fancy themselves world travellers
Immigration and tax evasion generally don't directly hurt someone who'd be pissed off that the government let the crime happen, unlike e.g. theft, robbery, rape, or even just loitering around drunk in public.
I'm not talking about philosophy, I'm talking about what gets people angry at the government.
Imagine that you're running a pub. There's a regular that dresses funny, runs a small show, drinks like a hole, and at the end of the day, always runs out without paying his bill. He's stealing from you. However, there are many people who go to the pub just to watch his antics. The food and drinks he steals are nothing compared to the extra money you make from that.
You have every right to kick him out, and you might do it out of spite because you will not tolerate thieves... but the pragmatic thing to do is to look the other way, so it's not surprising when that's what happens.
Your hypothetical is hollow sophistry while taxation is both law and social contract. Miss me with that "I'm not talking about philosophy, now imagine you're a cowboy riding a dinosaur" bollocks.
> - The government on the other side is the one you really have to worry about. Locals in Mexico City, all over South America, Bali, Thailand, Vietnam and really all over the world are pissed with these "digital nomads" (read: illegal immigrants) who work on tourist visas and upend the local economy while paying no taxes. It's only a matter of time before they all start cracking down.
Thailand explicitly gives out digital nomad visas for this?
About your last point. Interestingly, some governments have been trying to entice people to work remotely in their countries. Iceland is the latest example. I'm guessing that, while they don't directly collect the tax revenue, there's some incentive to the local economy as that's where a lot of the consumption would happen.
> upend the local economy and pay no taxes
I understand that taxes are important to maintain local infrastructure, but up to a certain point, isn't it beneficial having a few people literally bringing in foreign money to pay for the same products and services other locals pay for? There are places that officially encourage that behavior.
I understand how that might eventually upend the local economy - it's called gentrification and while digital nomads certainly contribute to it, it surely can't be fully blamed on them. Places where people want to live at will eventually get gentrified in some shape or form.
The logic behind labeling digital nomads as illegal immigrants completely eludes me. I genuinely don't understand why you would make that assumption.
> The logic behind labeling digital nomads as illegal immigrants completely eludes me. I genuinely don't understand why you would make that assumption.
Close to 100% of them are on tourist visas and are explicitly not allowed to work in the country. What else do you think an illegal immigrant is?
Can you share the source for this data? I find it exceptionally difficult to believe.
I do not condone people doing anything illegal. But you can maintain the lifestyle of a 'digital nomad' while not breaking any laws whatsoever. I definitely do not believe that 'close to a 100%' of people would risk their jobs, the wrath of the tax man and potential prison time by not abiding by the relevant legislature, especially given that there are usually many available options.
Well, say you're working for US company, and you're US citizen. You move somewhere else and still working for that US company. Now, try to get a work visa or work permit in this case. What are you going to do? Got to country X consulate and say "I want to work for the US company while I stay in your country, can I haz visa?"
But it entirely depends on local laws. Canada allows you to work for non-Canadian company that has no business in Canada. Things, a bit more complicated when you sell goods and services in Canada, though.
Spain has new digital-nomad visas that allow working in company that aren't in EEA. Before that, like many others EEA countries, they didn't allow working on tourist visa.
> "I want to work for the US company while I stay in your country, can I haz visa?"
Yes. As we've been learning for 20+ years from the music industry. If you restrict easy access to what people want or make unrealistic demands, then people just side step you. But if you make it easy and accessible people happily pay.
Obviously the details vary, but frequently the terms are as egregious as
1. Regardless of length of stay we now want a % of your annual earnings
2. The process involved takes orders of magnitude longer than your stay
3. The typical legal fees involved is orders of magnitude greater than what you'll even earn in the time period, meaning your best alterative to "No" is actually to take time off, paid or unpaid
4. You're literally bringing them an opportunity so it feels unjust to be barred. An opportunity to have tourist income -- something that many countries _pay_ to compete for.
There will be a massive upside for the first country to have a safe desirable location, with fantastic internet, and visa policies that make sense in the above rubric.
Usually it means work in the country you're visiting- I can't go to Mexico for a week and wait tables, but if I vacation there I still get paid by my employer.
Yes, but 'work' also has a legal definition. My research mostly involves Canada, so I will cite from the IIRC [1]:
"What kind of activities are not considered to be “work”?
An activity which does not really 'take away' from opportunities for Canadians or permanent residents to gain employment or experience in the workplace is not “work” for the purposes of the definition.
...
- long distance (by telephone or Internet) work done by a temporary resident whose employer is outside Canada and who is remunerated from outside Canada;
...
We recognize that there may be overlap in activities that we do not consider to be work and those activities which are defined as work not requiring a work permit in R186. However, the net effect (no work permit required) is the same."
So yes, you can work remotely from Canada, while on a tourist visa, for a foreign (non-Canadian) employer.
A lot of OECD countries have treaties (look up 'double-taxation treaty between A and B'), that govern this.
> This section contains policy, procedures and guidance used by IRCC staff. It is posted on the department’s website as a courtesy to stakeholders.
My point, which I also made in another comment in this thread, is that law isn't code.
If you spend 3-6 months every year on a tourist visa in Canada working for your US employer, Canada's going to cotton on eventually and take action. If you do it a few weeks a year, you'll likely be fine.
Their test is "are you directly or indirectly competing with a Canadian worker?". If your employer is really ok with you being abroad 3-6 months/year then they should, presumably, also be ok with hiring Canadians or legal permanent residents to do the same work 12 months/year from Canada.
Letting your employee be out of the country for 3-6 months every year on a tourist visa is a lot different from actually getting incorporated in that country and paying income taxes there.
>for your US employer
US/Canada have a very interconnected labor market, so in this context your comment is perfectly valid, and I would guess there are additional rules for this specific case. For literally any country other than US though, I don't see why it would be an issue for Canada or the country of origin, even if you do it repeatedly year over year.
> I don't see why it would be an issue for Canada or the country of origin, even if you do it repeatedly year over year
Unless you're intimately aware of the intersection of tax and immigration law between Canada and every other country on the planet, that's a rash statement to make.
> Letting your employee be out of the country for 3-6 months every year on a tourist visa is a lot different from actually getting incorporated in that country and paying income taxes there.
Except that the company's responsibilities may extend far beyond just incorporating and paying income taxes. Every country's tax system is different and weird.
Companies don't require their employees to tell them their real address just to be mean, or to prevent labor arbitrage. They have genuine, legal reasons to do this.
Lee Child started his career as a writer because it was one of the few jobs he could do while physically located in the US while not having local work authorization.
It comes down to how you define 'working from a country'. Doesn't it mean 'being employed by a local company and paying income taxes' there?
If I go on a vacation and respond to a few work-related emails, am I breaking any laws because I'm working on a tourist visa? Yes, that is ad absurdum, but I'm trying to point out that it's not as clear cut. There is a line that international treaties define, and staying someplace (sometimes even up to 6 months) and working there doesn't necessarily have any income tax implications for you or your employer.
> People's attempts to hide their remote lifestyle are mostly laughable
That can depend on how/where they're staying. If they're at "home" abroad, with a similar time zone, then there's often no way to tell except technically.
I have a team mate who often spends time across the border for weeks at a time. We wouldn't know if she didn't mention it.
We are in the EU though, so working from other EU countries is fine, within limits.
Timezone is noticeable, but really depends on how different and how many "Webcam On" meetings you have. My home office has blackout curtains, so it's always the same light condition regardless of time of the day.
Now, it's hard to attend some meetings when time difference is very dramatic, like it's 1am in your local, but 10am at work HQ.
> If you go too far of course, then your workmates might notice that it's winter when it should be summer.
Doubt. Most of my co-workers use virtual backgrounds. I wear the same home clothes the entire year.
> And anyone with the login details can see where your login pings are from.
Good luck, I have a WireGuard box at my parent's house that I route my work traffic through when needed. Maybe I should start a business of hosting "residential" VPN exit nodes...
Except I use YubiKey for my 2FA, so where my phone is irrelevant. Moreover, I've never ever granted 2FA app location permissions. Don't even remember any of them asking it. It's generally GeoIP and time is well...the same everywhere?
I’m quite suprised you are willing to hire people who you know are lying to you.
To me, someone like that has demonstrated that they can’t be trusted and I would remove them from the business ASAP.
You can fix a lot of things with an employee/employer relationship, but those things require trust. You just don’t ever know where you stand with someone who lies.
That's kind of an important thing to lie about (money and work related), I'd rather have someone not lying about anything at the very least on that subject.
Actually, I'm editing the comment. Even lying about anything is bad because you'll eventually start lying about something work related too. That's just how it is, whether it's a time table, some interaction you had with a customer where you don't quite paint the truth or anything else. Eventually it always impacts the real world. That's the thing about the word "lying", it's not so precise. You practically mixed "omitting information" and "lying" together even though they can be extremely different in quality, depending on intent, situation and much more.
> I’m quite suprised you are willing to hire people who you know are lying to you.
From what I understand, that's most job interviews. If someone has very little practical coding skills, but is a LeetCode ninja, then you get what you ask for, I guess.
I don't lie, but it also seems to make me unpopular. Fortunately, I don't need the work.
You don't need to worry about the government on the other side either unless your company actually does business in that jurisdiction in such a way that they can sanction you. Local governments are usually trying to attract digital nomads with remote working visas. One gov can crack down - the nomad would just move to a friendlier jurisdiction.
As a remote contractor turned employee with adhd, I've stopped guilting myself about this and stopped really trying to hide it. I focus relentlessly on doing whatever it takes to get the shit I've agreed to do done in the time and way I can best do it. But I'm not moving to another country either.
I don't violate foreign laws if I buy a goods online from another country.
I don't need to know anything about laws governing manufacturing to purchase a screwdriver made in California. I only need to know my own laws.
Is it legal to import screwdrives in my jurisdiction? Yes.
Can I do this transaction without violating my own sanction laws? Yes
That's it.
Whether the California entity is allowed to sell to me is their problem, not mine.
The same applies for labor. I want to buy foreign labor? I negotiate the price, I get the work, I pay the invoice.
Which laws do I consult? Every potential country-to-country mix in the world?
No, I consult my own laws.
Is it legal to purchase foreign labor/services. Yes.
Can I do this transaction without violating my own sanction laws? Yes
Whether I buy a website or a screwdriver - I do not need to know anything about who I'm buying it from beyond the necessary information to avoid international sanctions.
> The government on the other side is the one you really have to worry about. Locals in Mexico City, all over South America, Bali, Thailand, Vietnam and really all over the world are pissed with these "digital nomads" (read: illegal immigrants) who upend the local economy and pay no taxes. It's only a matter of time before they all start cracking down.
Also your employer needs to worry about this. And therefore you need to worry about your employer suing you.
If you think that's far fetched, do you think your employer will NOT throw you under the bus when France sues your German employer for turning a blind eye to where their employee is?
Frankly as a tech manager YOU are adding legal risk to yourself personally by protecting the employee from the company. Arguably YOU personally are complicit in tax fraud.
This is trash. I hire engineers all over LATAM. I could not care less if they pay their taxes. I do not pay any taxes in LATAM. My company does no business in LATAM. What are they going to do? Sue my company? LOL.
P.S. I used to be a lawyer and I can weigh the risks. Completely negligible compared to all the other risks I have as a founder.
As you say this is risk. You can make any tradeoff you want, and you are probably right.
You can hire someone you think may be working from Iran. You're pretty sure you won't get caught violating sanctions for it.
> I could not care less if they pay their taxes
I don't know LATAM employer side taxes, but if their tax offices do decide to target you then what you "could not care less" about will not matter much.
But shrug, yeah you probably won't get caught.
My favorite lawyer quote: "Legal didn't say we can't do it. Legal says if we do it then we may all go to jail. It's not the same thing".
France won't sue the German employer, If anything illegal occured, "France" will sue the person exporting the labor, not the person buying it.
The jurisdiction of France encompasses French people, and French entities.
If a law was broken in Germany about importing labor, then it's the German goverment enforcing the law.
Which only means you have to follow the laws of your own country only. Which includes your own countries sanctions, but doesn't include all countries sanctions.
> The jurisdiction of France encompasses French people, and French entities.
You know that's not true, because you know that shoplifting in France applies to visitors too. Even if one tourist assaults another tourist. Or (in some other countries) two unmarried foreigners kissing in public.
People have had their children taken away while on vacation, because they beat them and local law did not like that.
If you think that France doesn't care about illegal workers within their borders then I don't really know what to tell you.
Different countries have different level of cooperation. I would not bet on an investigation in France about (alleged) organized tax fraud being "unable" to reach German defendants.
> France won't sue the German employer, If anything illegal occured, "France" will sue the person exporting the labor, not the person buying it.
Ok, good luck with that. I hope you got good lawyers advicing you on this risk, and defending you if it happens to you.
> Which only means you have to follow the laws of your own country only.
Like how Assange (Australian citizen) has no risk of being deported to the US to face charges based in laws only in the US, for something he allegedly did while in Europe?
The US doesn't deport its own citizens even to face charges of war crimes, so it may be a special case. But other countries do.
The grandparent comment (from aiisahik) is now replying to you about contractors.
For contractors I agree much more. But a contractor is not an employee (with a huge caveat, because depending on jurisdiction a contractor can be declared a de facto employee, and legally treated as such. It's a long and complex story).
Even from the article:
> “If an employee is in the wrong place long enough, it can have real tax implications for the company as well as the individual,” said Black, who added that many companies fear accidentally establishing a taxable presence in a foreign country.
This from a guy who "helps companies deploy and manage employees around the world" for a living.
And as the employer, I'm the importer of the labor so I don't care. If my contractor didn't pay their taxes that is not really my problem - they will just have to do deal with that themselves. What's very important is that I, as labor importer, didn't have to pay payroll taxes of the country where the labor was based. In the case of Argentina it's close too 100% of the salary. When i pay my contractor triple the average engineering salary they would get from a local country they are more than happy with this situation.
LATAM: government wants income tax, and foreign exchange cuts too. Argentina wants employees to run their paychecks through the central bank so that they can take a 50% cut.
And they also have sales tax.
So government are targeting those off the banking system and export regulations
How do the tax offices of other countries "target me" exactly? What legal options do they have against a US based company with no business/customer in that country?
They can go after my contractors but then my contractors would just move to another country like Uruguay (which btw is very tax friendly towards remote workers and hardly charges any taxes). Some of my contractors have done exactly that.
> Arguably YOU personally are complicit in tax fraud
"I don't understand. All I did was get up in the morning." line from The West Wing from a similar circumstance when the council threatened jail time for not reporting someone.
- People's attempts to hide their remote lifestyle are mostly laughable. You don't need sophisticated tooling to know that someone isn't where they say. I see you every day. I can recognize patterns. I can see the changes in work hours, response times and just general behavior. I can tell when you have just rolled out of bed with a coffee or come back from the club.
- Most managers I know don't give a shit. In fact we'd rather not know at all. It's really HR you have to worry about (and I'm not going to tell them unless you give me a reason to).
- HR itself only cares because of the tax implications. Inter-state taxes are bad enough, figuring out international ones are basically impossible. The company can get into major trouble if they are not following local employment laws, and "I didn't know my employee lived there" isn't a good enough defense.
- For those saying "IRS will come after you", these remote employees are paying full federal, state (mostly CA), payroll and various local taxes while using none of the benefits. The government is probably ecstatic that such people exist.
- The government on the other side is the one you really have to worry about. Locals in Mexico City, all over South America, Bali, Thailand, Vietnam and really all over the world are pissed with these "digital nomads" (read: illegal immigrants) who work on tourist visas and upend the local economy while paying no taxes. It's only a matter of time before they all start cracking down.