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I live in Croatia which has extremely high taxes. I decided I might try to grab some job from Stackoverflow job ads. I see that many jobs offer remote and full-time contract. My question is, whom do I pay tax for my income? The country where company is, or Croatia?

If it is Croatia, is there any way to avoid it and pay to any other country? E.g. open bank account somewhere else and receive all income there and pay tax to the host, or else pay tax to the country offering me a job?

  • Is there a specific country, or asking in general how this works? – Hart CO Sep 19 '17 at 20:23
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    Whatever you do, I recommend against trying to evade taxes. – Our_Benefactors Sep 19 '17 at 20:29
  • @HartCO I wonder how these things work in general. The only specific country is Croatia, where I live and it's impossible to pay these high taxes. I am trying to find a way to pay this tax to anybody else but Croatia... – Kunok Sep 19 '17 at 20:31
  • @Our_Benefactors Thanks for advice. I plan to pay tax, but to the worthy ones. If I pay this up to 40% tax in Croatia, I know that 90% of this money will go to corruption, so it's waste. I'd like to play legit but also fair for both sides. – Kunok Sep 19 '17 at 20:32
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    @Our_Benefactors: In general, trying to pay taxes elsewhere is considered tax avoidance, not evasion. The difference is that in tax avoidance, you change the actual situation, but with tax evasion you lie about the actual situation. It's the lie which makes evasion illegal. – MSalters Sep 20 '17 at 12:19
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Every country has their own tax laws. Many countries have double taxation agreements with many other countries, these agreements dictate how you will be taxed. When these agreements do not exist between Croatia and the country you earn income in, you may face double taxation.

The agreements vary, but I believe the most common scenario is that your tax liability remains chiefly with your country of residence. You'll have to investigate the agreements that Croatia has with other countries specifically to understand the tax liability fully.

I'm not sure if this is an official source, but it looks proper:
AGREEMENTS FOR THE AVOIDANCE OF DOUBLE TAXATION

  • Thanks. It seems that it is really bad luck to be Croatian, my first strategy should be to change nationality and country of residence, then search for job online... – Kunok Sep 19 '17 at 20:43
  • @Kunok That could be, just be sure to assess factors other than income tax rate when evaluating the appeal of other countries. Some countries have relatively low income tax but have sales/value added tax, property tax, etc that affect cost of living significantly. – Hart CO Sep 19 '17 at 20:51
  • Just did a bit more googling on for local websites, there is this post (lider.media/znanja/…) which describes that the only way to avoid being taxed for your income is to exit its residency. It's very sad that our country put us to the bottom and if we try to find bread outside, it will strip off you whatever you earn. I just started exploring these topics, I hope to find a decent strategy. – Kunok Sep 19 '17 at 21:06
  • For most countries with a double taxation agreement you have to pay the taxes in the country you're living in, but only if you're living there longer than half a year. Let's say you're living some month in Croatia, some in Germany and at least some days in another country, then there is no country where you've been longer than half a year. Then you don't need to pay taxes at all. No kidding! I did this once for Germany, Austria, Japan. – Matthias Sep 21 '17 at 13:40
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    @Matthias Some countries (e.g. US) tax their citizens' world-wide income regardless of where they reside, possibly with credit for taxes paid to foreign governments, and possibly limited exemptions for income that is earned abroad. Presumably your country of citizenship has no such rules. – Dilip Sarwate Mar 28 '18 at 15:45
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As for Croatia (originally targeted country by question),

I did small check on this website:

http://www.porezna-uprava.hr/HR_porezni_sustav/Stranice/porez_na_dohodak.aspx

(You might need to use Google translate to read it)

It appears that tax is paid to the country where resident lives. In my case (Croatia) it's 36% tax for salaries offered on board.

  • But the wage tax is paid by the company right? – Marco Pappalardo Sep 23 '17 at 9:08
  • You just pay the income tax based on your country of residence. In theory there is no difference from a normal employment in the same country then – Marco Pappalardo Sep 23 '17 at 9:09
  • @MarcoPappalardo Yes this is is strictly related to income tax. As for wage tax, if I understand, these are health insurance and stuff? As far as I understood, these are paid by the company since it's included in perks section in job ad. – Kunok Sep 23 '17 at 12:37
  • Yea in theory yes. I am actually checking the same for a company. Let’s see if we get more updates soon :) – Marco Pappalardo Sep 23 '17 at 14:48

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