Dear All,
I am probably not the only one who is now working from home and is slightly surprised how efficient the work from home can be. I guess in the post-Covid world this method of working may become more of a norm for some businesses and many people would consider to relocate to a place where sun is shining more often than UK. I am not packing my suitcase yet but considering how practical would it be to work from a different place and which places would be better or worse from the financial point of view.
I know many employers (probably including my current one) will not be very happy for people to work from home in a foreign countries as it would greatly complicate their tax affairs but others might be more flexible. Alternatively I may consider to work as a self employed contractor in which case the employer / client shouldn’t care much where I physically sit.
My question is which country would be the best choice from the tax/NI burden point of view, ease to deal with the taxes in general and any other considerations. My employer/client would most likely be UK or Northern Europe so I would only consider to live somewhere in the Mediterranean European coast - I would probably need to pop in to the office from time to time so relatively short distance and access to busy airport would be a benefit, it would also be easier to live in same or similar time zone. I wouldn’t consider North Africa due to political instability and cultural differences. Also Turkey and Albania are probably too different culturally to consider for the permanent home but other than that I don’t have any strong preference and probably the biggest differentiator will be financial.
Assuming the annual gross income of about £80k/€90k, in which country the take home pay would be highest? I did some basic research and calculated tax using some online calculators but they all assumed full time employment. I am not sure how reliable the calculators are and more importantly I think they would not be applicable for self employment or limited company contracting (or whatever is a normal way to do it in a given country). Any comments or suggestions on which country allows for better tax optimisation would be most welcome. My research so far is summarised in the list below, starting from the west:
Portugal (I know it isn’t exactly Mediterranean) - Net €72 000
- Tax - Portugal has the “non-habitual tax regime” if I understand the income would be tax free if I could find en employer out of Portugal who agrees to pay in gross terms (probably not realistic). In more likely scenario I would probably have to set up some form of company there and be liable for flat 20% tax (€18 000), is that correct?
- NI - Is there any additional contribution for the NI if you get the non habitual status?
- Staying by the coast near Lisbon would give easy access to busy (not seasonal) airport. Same time zone as UK. The non habitual status is for 10 years.
Spain - Net €59 524
- Tax - €27 618
- NI - € 2858
- Number of busy airports on south coast although some of them are a bit seasonal
France - Net €60 030
- Tax - €22 986
- NI - €6984
Monaco - Different league – cost of accommodation and living unacceptable
Italy - Net €53 415
- Tax - €28 313
- NI - €8271
Malta - Net €65 98
- Tax - €21 595
- NI - €2419
- The island a bit too small
Slovenia - Net €58 520
- Tax - €31 480
- NI - ??
- Limited flight options. Cost of accommodation and living a bit lower than in more western countries
Croatia - Net €68 400
- Tax - €21 600
- NI - ??
- Very few flights out of the summer season. Accommodation and living cost a bit lower
Montenegro - Net €70 200
- Tax - €19800
- NI - ??
- Slight concern about political stability. Also the flight connections aren’t great. Accommodation and living cost a bit lower
Greece - Net €52 321
- Tax - €28 629
- NI - €9050
- Flight options out of the summer season very limited apart from Athens
Cyprus - Net €64 686
- Tax - €19 268
- NI - €6045
- A bit long flight distance
From the above Portugal seem to be the most attractive if I can use the non habitual tax regime the way I think it works. This is closely followed by Montenegro and Croatia although for all top three countries I am not sure if/how much NI I would have to pay. Balkan countries seem to have very limited flight choices in the winter months but on the flip side the cost of living and accommodation is on the low side (ignoring the most popular tourist destinations). Cyprus and Malta are not bad on taxes although Cyprus is quite long flight away, Malta on the other hand is a tiny island – may feel a bit claustrophobic after a while.
Greece and Italy are on the bottom of the list with France, Spain and Slovenia somewhere in the middle of the pack.
Obviously this is all assuming working as a self employed or limited company contractor would attract the same tax burden as normal employment - which is probably not true in most cases.
Would any of you have experience in tax affairs in any or all countries above and be able to comment if my calculations are about right, optimistic or conservative? Are there any (legal and legitimate) ways to optimise the tax/NI burden in the above jurisdictions? Anything else to consider?
Any comments welcome
- Home
-
Tax News
- Budgets and Autumn Statements
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings & Investments, Pensions & Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations & Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practice and Methods
- Professionals in Practice & Industry
- General
- TaxationWeb
-
Tax Articles
- Budgets and Autumn Statements
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings and Investments, Pensions and Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations & Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practice & Methods
- Professionals in Practice & Industry
- General
- Tax Tips
-
Tax Forum
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings & Investments, Pensions & Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations and Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practices & Methods
- Professionals in Practice & Industry
- General
- Tax Jobs
- Get in Touch