Firstly, a required disclaimer: Nomads.com does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

The reality of tax as a digital nomad is complicated. It's a gray area because the laws haven't been updated yet to fit this new reality. There's some general guidelines that are relevant in most (developed) countries.

Firstly, if you're American, you're pretty much f'd because the U.S. government will tax you regardless of where you live (!). Then again their Navy Seals will save you if you get taken hostage anywhere, many can't say the same.

If you're from developed countries, you're usually a tax resident in a country if you live there for 183 days. Although some countries like Taiwan make it shorter at 90 days already.

Important: it's up to your national taxation authority (e.g. IRS) to make the judgement if you're a taxable resident or not. They will judge it based on where you're registered as a resident, how many days you are physically in the country, where do you rent/own a house, where do you work, where do you spend your money, where do you have bank accounts and assets, sometimes even where your friends and family are located. This complicates things.

There's more odd laws that make it more complicated. The idea that you can just deregister in your country as a resident, fly to the other side of the world and stop paying tax is mostly incorrect. Many developed countries have a so-called tax residency fallback law, which means if you're not a resident elsewhere, you immediately for tax purposes are a taxable resident in the country of your citizenship, or sometimes the last country you were a resident. This means a German citizen who becomes a non-resident, travels around the world to work remotely, is never a resident anywhere, then comes back after 7 years, can potentially be retro-actively taxed for the years he was away for his worldwide income. We know cases where this happened.

If you don't want to pay tax in your home country, you literally need to move quite permanently to another country, become a resident there, rent or buy a house there, and actually live there 183 days per year. And preferably, get rid of all assets in your home country, not take on clients in your home country, pretty much cut ties with your home country. Intense, right? You can visit your home country, but you will not even for a second want to consider opening your laptop there and work, because that might make you a tax resident there again. You can visit and have a coffee. That's about it.

Please note international tax law is one of the most confusing topics. The internet has thousands of websites that act like they have any idea what's going on, but since you're talking about 187 nationalities moving through 187 countries, there's so many intricacies that it's impossible to get it completely right for even the most advanced tax lawyers. International tax law is simply a gray area too.

So what should you do? Realistically, if you're planning to "go nomad" for awhile, stay a resident in your home country (maybe register at your parents house), if you have a company keep it in your home country and pay tax in your home country, as you did before. Your home country keeps receiving its tax and you remain a resident and it probably doesn't mind. What about the countries you're visiting? Again a gray area. Generally if you're not competing with local companies or local people, not hiring local people, not working for local companies in the country you're visiting, you're okay. I'm not saying you're completely legal. But the laws surrounding work permits in countries are generally made to protect local workers and companies. If you're French and your French company has French customers and French employees and you work from another country, it's hard for that country to argue you're competing with companies or the labor market in the country you're visiting.

We would suggest consulting an international tax lawyer. But we have to be real here. Right now, they're simply unaffordable. The international tax lawyers that actually know what they're talking about are companies like EY, KPMG, Deloitte etc. They won't advise people making $25,000/year. They advise you when you make $1,000,000/year and they'll charge a lot. But you'll be in the clear. But that's completely unattainable for most people. The international tax lawyers under this amount are simply not good enough. So to be radically honest, international tax for nomads is now a legal minefield. Tread carefully.