I always wondered how countries within EU (and Schengen zone) can prove to whom are you required to pay income taxes.

All the countries I will mention are part of the EU-Schengen zone.

Let's say I work fully remotely and I have residency in Country A. I travel a lot within the Schengen zone and have my business registered in Country B. I don't pay taxes to country where I officially reside, but I pay it to Country B.

To be more clear, I don't spend more than 180 days in Country A. Even if I did, how could it possibly be proven? I'm free to travel within the Schengen zone.

As far as I'm aware of INCOME earned in one country MUST be taxed in that country. So taking a look from the legal perspective each country I visit, I would have to pay taxes to it (As I work remotely when I travel). There is no way I'd be doing that for number of reasons.

Will I be good paying taxes only to Country B while residing in Country A and travelling / working in other countries within Schengen area? What could go wrong there?

1 Answer 1


While the Freedom of Movement gives citizens the right to live and work in any EEA country (not just EU, not just Schengen), you do not have a right to zero bureaucracy.

Whether you owe taxes in a country depends on the laws in that country. If you work in that country you may also have to register your business there, but this might depend on the legal form of your business and on the country's rules on residence. Most countries also have tax allowances so that small earnings in that country might not lead to taxes. While only the part of your income earned in that country can be taxed, the tax rate may depend on your global income. Under no circumstances will such travelling result in noticeably lower taxes.

In addition to taxes you also have to consider social security. Different countries might have compulsory contributions for freelancers.

The result is that if you value simple taxes, you shouldn't try to do a digital nomad thing in the EEA, at least not across countries. If you skirt your obligations that is tax avoidance. It is your obligation to pay the correct taxes in the correct place. If the tax office asks why you didn't pay taxes there, it will be your obligation to show that you don't owe those taxes.

Note that tax residence is not something you can voluntarily select. Each country has its own rules that determine whether you are their tax resident. The only workaround is that you can incorporate a business in one member state so that the businesses' income is only taxable there, but you'd then be an employee and your employment would be subject to a complicated potpourri of regulations.

If you like travelling, the best approach tax-wise is to separate business from personal life. Don't work while on holidays.

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