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Income taxes abroad: 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 will 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 any other sources, or capital gains from sales of property worldwide.
EU countries regularly exchange income tax information to ensure taxpayers meet their obligations and combat tax fraud and evasion. Contact your local tax office for information about property taxes, local taxes, gifts, and inheritance taxes.
- You will usually be considered tax-resident in the country where you spend more than six months a year.
- You will generally remain tax-resident in your home country if you spend less than six months a year in another EU country.
Check tax rates, contact details of tax authorities, and definitions of tax residence in the different EU countries:
Dual residence
In some cases, two countries could consider you a tax resident simultaneously, 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.
Posted workers/jobseekers
In some cases, such as for workers posted for a limited time or jobseekers abroad, you may be considered tax–resident. Therefore taxable, in your home country, even if you stay abroad for more than six months – if you keep your permanent home in your home country and your personal and economic ties with that country are more robust. 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 the property) arising there.
In these cases, be aware that there are solutions to double taxation and ensure 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 a tax resident, even if you don’t live there. Some countries grant this status of fictitious tax-resident to cross-border commuters.
Under EU rules, each country still has certain latitude in deciding 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 a tax resident or not, it will be obliged to give you the same allowances and tax reliefs that it provides to a resident.
Of course, suppose you receive all allowances available to residents in the country where you work. In that case, you could not expect to receive all allowances and reliefs available to residents in your country. Be aware that tax authorities will communicate with each other to ensure that you don’t receive a double set of allowances and reliefs.
Equal treatment
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 a 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 expenses are incurred in another EU country.
- Any available tax deductions for mortgage interest, even for a house you own in another EU country.
- Joint tax assessment with your spouse, if this is possible in that country.
