Remote workers living outside their home country face complex tax obligations — potentially owing taxes in both their employer’s country and their residence country. This guide covers the main scenarios.
- Your home country tax residency status
- Your physical location(s) during the tax year
- Days spent in each country
- Employment contract showing where your employer is registered
Understand tax residency vs citizenship
Tax residency is where you are legally required to pay taxes — determined by where you spend most of your time (often 183+ days) or where you have strong economic ties (home, family, employment). Most countries tax based on residency, not citizenship. The USA is the main exception — US citizens owe US taxes worldwide regardless of where they live.
USA citizens abroad: file Form 1040 + Foreign Earned Income Exclusion
US citizens must file a US tax return every year regardless of where they live. However, you can exclude up to $126,500 (2024) of foreign-earned income using Form 2555 (Foreign Earned Income Exclusion) if you meet the bona fide residence or physical presence test.
Check if a tax treaty applies between countries
The USA has tax treaties with 60+ countries. The UK has treaties with 130+ countries. Treaties often reduce or eliminate double taxation. Check the IRS treaty table (irs.gov/tax-treaties) or HMRC’s double taxation relief page to find the specific treaty provisions for your countries.
UK remote workers in EU post-Brexit
UK workers physically present in EU countries may owe taxes in those EU countries after working there for 183+ days. France, Germany, Netherlands, and other EU states have strict short-stay rules for remote workers. Many UK remote workers in the EU must register locally and file tax returns.
Digital nomads: understand controlled foreign corporation rules
If you own a foreign company while being resident in another country, CFC (Controlled Foreign Corporation) rules may require you to pay home-country taxes on company profits. This affects US citizens with non-US companies regardless of country.
Frequently Asked Questions
Most countries consider you a tax resident if you spend 183 or more days per calendar year in that country. This is the most common trigger for tax obligation. Some countries (UK, Germany) count days differently or have additional “tie-breaker” tests based on family, home, and economic connections.
Generally no — if you are resident in Kenya and your employment duties are performed in Kenya, your income is taxable in Kenya under KRA rules. The UK company should not withhold UK income tax if they are not your UK employer. Confirm with a tax advisor, as arrangements vary.
Consult an international tax specialist for complex situations. Expat Tax Online specializes in US expatriate tax filing from $199.