Income taxes abroad
Affected by Brexit?
Which country can tax you?
There are no EU-wide rules that say how EU nationals who live, work or spend time outside their home countries are to be taxed on their income.
However, the country where you are resident for tax purposes can usually tax your total worldwide income, earned or unearned. This includes wages, pensions, benefits, income from property or from any other sources, or capital gains from sales of property, from all countries worldwide.
EU countries regularly exchange income tax information to ensure taxpayers meet their obligations and to combat tax fraud and tax evasion. For information about property taxes, local taxes, gift and inheritance taxes consult yourlocal tax office.
Each country has its own definition of tax residence, yet:
you will usually be considered tax-resident in the country where you spend more than 6 months a year
you will normally remain tax-resident in your home country if you spend less than 6 months a year in another EU country.
Check tax rates, contact details of tax authorities, definitions of tax residence in the different EU countries:
- United Kingdomgben
* Information not yet provided by national authorities
In some cases, two countries could consider you a tax-resident at the same time, and both could require you to pay taxes on your total worldwide income. Fortunately, many countries have double tax agreements, which usually provide rules to determine which of the two countries can treat you as a resident.
If the tax treaty does not provide a solution or if your situation is particularly complicated, contact the tax authorities of one or both countries and ask them to clarify your situation.
In some cases, such as for workers posted abroad for a limited time or jobseekers abroad, you may be considered tax–resident, and therefore taxable, in your home country even if you stay abroad for more than 6 months - if you keep your permanent home in your home country and your personal and economic ties with that country are stronger. Contact the tax authorities to check which rules apply to you.
In such a case, your host country may also tax you - your local employer may, for instance, deduct taxes from your salary at the time of payment.
In addition, whether or not you continue to be resident in your home country, that country may tax income (for instance from property) arising there.
In these cases, be aware that there are solutions to double taxation and make sure that your income is not taxed twice if it doesn't need to be.
Fictitious tax residence
Under some double tax treaties, the country where you earn all or almost all of your income will treat you as tax-resident, even if you don't live there. This status of fictitious tax-resident is granted by some countries to cross-border commuters.
Under EU rules, each country still has a certain latitude to decide what percentage of your income represents 'almost all'. In any event, whether the country where you earn all or almost all of your income treats you as tax-resident or not, it will be obliged to give you the same allowances and tax reliefs that it gives to a resident.
Of course, if you receive all allowances available to residents in the country where you work, you could not expect to receive all allowances and reliefs available to residents in the country where you live as well. Be aware that tax authorities will communicate with each other to ensure that you don't receive a double set of allowances and reliefs.
Under EU rules, no matter in which EU country you are considered a tax-resident, you should be taxed in the same way as nationals of that country under the same conditions. For example, in the country where you are tax-resident or where you earn all or most of your income, you should be entitled to:
any available family allowances and tax deductions for childcare costs, even if the costs are incurred in another EU country
any available tax deductions for interest on mortgages, even for a house you own in another EU country
joint tax assessment with your spouse, if this is possible in that country
If you feel discriminated against, you can seek personalised advice.