This will allow them to make sure that they will cease being a tax resident of the first country and will accordingly become a tax resident of the second country. Remote workers who plan to relocate to another country need to be aware of the tax residency rules applying in both the country of departure and the country of arrival as well of the double tax treaty concluded between these two countries. Fortunately, Bulgaria and the Netherlands have signed a double tax treaty aiming to prevent double taxation. Hence, it may happen that the worker may, for a given period of time, be subject to tax in both countries. At the same time, Bulgaria may not immediately start taxing the remote worker as, under Bulgarian law, she needs to either reside in Bulgaria for 183 days per year or prove that her center of vital interests is in Bulgaria. The decision whether an individual is a Dutch tax resident is rather subjective and made on a case-by-case basis. More specifically, the Netherlands may initially tax the income generated from her remote work in Bulgaria based on the assumption that her stay in Bulgaria is too short to lead to a change in her tax residency. Therefore, if a worker works remotely in a given country, she would in theory be subject to tax in that country and not in the country of her employer.įor example, if a worker works remotely for a Dutch company in the Netherlands and suddenly relocates to Bulgaria to continue working for the same Dutch company, she may be temporarily subject to tax in both countries. The basic rule of thumb in the field of tax law is that a worker is taxed in the country where she exercises her activities. The wide proliferation of remote work may lead to a clash between the laws of the country where the remote worker is based and the country of the employer Experts expect that the number of remote workers will rise even more in the near future. On a global scale, (already) 16% of all companies are already fully remote and 62% of all workers claim to work remotely at least occasionally. In recent years, there has been an increase in the number of remote workers all over the world.
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