Wait, aren't digital nomads literally bringing money in from another country? They pay taxes on everything they consume, yet they don't take the money from inside the country, they bring it in from the outside.

Why exactly would they be pissed?

That foreign money mostly goes to a handful of landlords/Airbnbs and tourist-friendly businesses (which are often foreign owned themselves). That in turn drives up prices of everything for locals – who are seeing no increase in income and moreover have to pay income tax and a ton of other taxes on it, something that digital nomads conveniently skip.

An influx of foreigners and foreign money isn't automatically welcome in a local economy.

Take a random tourist town: Say, in the southern coast of Spain. Then tell them that finally, they had managed to get rid of all the tourists, forever. Is that good or bad for the town? It's not as if there are no externalities, but in general, tourism is going to be good for your economy, and the amount of extra taxes the tourist pays on lodging is pretty low. Which Caribbean islands do better, those that have a lot of tourists, or those that don't take any external money?

Also consider what happens in the opposite side of the remote worker, where what you get is the equivalent of a foreign worker who comes in, pays taxes, but spends basically nothing, and spends all their salary in remittances, to be spent abroad by their family. The worker is competing with you for the job, but then doesn't spend it locally! You will not find many municipalities that are all that happy of having a lot of jobs formerly done by locals in offices suddenly done by someone that is far away.

Not all these foreigners are living in tourist towns. They aren't staying for a week or two, but months at a time. They aren't staying in hotels meant for tourists, but rather competing with locals for apartments (a lot of them having turned into Airbnbs because of it).

Competing over housing i quite significant if you ask me.

While OP is right in that these people are a net good for the economy at large there's a reason a LOT of countries do not allow foreigners to own property. The US is one of the few places where you can without much trouble. You can see the problem this causes with states adjacent to California, like Nevada, where the average house is now over 10x the average income thanks to the tech emigration.

Edit: No, more potential careers as an underpaid waiter or touristic guide is not an upside.

And as OP explained in the comment you're replying to, tourism is not necessarily a positive for the locals:

> That foreign money mostly goes to a handful of landlords/Airbnbs and tourist-friendly businesses (which are often foreign owned themselves). That in turn drives up prices of everything for locals – who are seeing no increase in income and moreover have to pay income tax and a ton of other taxes on it, something that digital nomads conveniently skip.

It doesn't really matter if you're a digital nomad or a classic tourist, the same downsides apply, but in the case of digital nomads they're even working while being on a tourist visa. They should pay taxes to the local administration but they don't, so that makes them a double problem.

It is very hard to collect personal income tax in developing countries. OP's tax revenue claim just doesn't match the data. On the other hand, corporate tax and VAT are very easy to collect. Digital nomads are very good for these revenue streams.

It is true these digital nomads don't contribute to social security benefits. But they also rarely take from it. So it is a mixed bag.

I, a lowly middle class worker buy a house in Cheapville. I can afford it, and the property tax, so I am happy. 20 years later I own my house and hundreds of thousands of immigrants from TechVille come buy up all the property. Great! There's no houses really on the market so the value sky rockets! Problem... my house value goes up, but so does my property tax. In fact, it's so expensive now I can no longer afford to live in the house. I have to sell MY PROPERTY because the STATE has imposed a tax specifically designed to destroy the idea of property as an owned right. In some circles this would be considered theft-by-taxation which is probably the only correct interpretation of this scenario. My house has to be sold because I can't afford it, it's bought (read: stolen) by some rich tech bozo with more money than sense, and I have to move. Probably to a different state where then I contribute to the very same problem there. The problem is the regressive property tax enabled this. The only solution is to not have them for residential non-commercial property. If property is not producing tangible value it should not be taxed. Taxes are collected at the sale of the home - this is enough. If it isn't, congress needs to tighten the purse strings.

Property taxes are regressive, prevent you from ever truly owning your own plot, and disproportionately reduce the wealth of the people who spend most of their lives creating it for other people. They are probably the most distilled form of evil the financiers of a state or country can create because they are totally unavoidable and because of the way percentages and property value are calculated can very quickly go way out of hand. The only people that benefit are the rich house flippers and people with so much money their property taxes are a rounding error. It puts property in only the hands of the wealthiest. How is this a good thing?

Property taxes are a form of wealth tax. The more wealth you own in the form of property, the more you pay in tax. Many people who work for a living don't own any property at all - about 35% of households in the US are renters. They don't have this problem of "wow my house is worth $1.2 million so I've got to sell it and move" - they've got bigger problems.

200 years from now, your descendants can pay their annual peppercorn to the state each year (after inflation and the statutory maximum annual increase have their expected effect) while the plebs toil in labor to pay you rent.

It really is such a shame that the founders of our country were so short-sighted that they explicitly prohibited that in the constitution. Maybe we should think about amending that.

I suspect that will be a net negative for anyone who needs to rent because they cannot afford a mortgage, maintenance cost, insurance, contribution to shared infrastructure like plumbing and electrical, and taxes together.

I considered renting an apartment in two different commune-owned buildings (I was a student, not looking to own). Both were just as expensive and in significantly worse condition than all of the neighboring housing options. I found w nice place, but would have been better off with a slumlord rent-seeker than either of those places.

Yes people will build more medium density housing instead of having zucchini gardens in one of the most expensive regions of the world. Higher density would be good for renters in the local area.

This, taken to it's "extreme": https://en.wikipedia.org/wiki/Land_value_tax

Pretty well studied, and has a lot of support across ideological viewpoints.

I do wish that land value tax would replace other forms of taxation in many jurisdictions.

Taxes are completely justifiable to allow you to have these means to enforce your ownership rights.

Where you and I would agree is on the assessment methodology which is in most jurisdictions a money grab since it's usually always based on the market value of the property and not on the costs to provide necessary gov services.

100% true that a physical property is not exactly going anywhere, and so it's extremely convenient to use as a stand-in for wealth / ability to pay taxes. That said, this could be worked around if governments were incented to do so, given that finance is almost entirely electronic at this point; offshore banking could be reined in, for example. There will always be loopholes and ways to avoid a tax burden, but if the (financial) penalties are commensurate to the dodge, then there's a reasonable disincentive.

If there is zoning (and well managed conservation), I don't have a problem with it. I've lived near areas with no zooning at all, and that's a race to the bottom.

You could have 99 year leases or similar instead of ownership (Japan does this?), but that is unfair to e.g. grandchildren who inherit a farm which they've worked hard at all their lives (where land is essentially their means of income.)

Yes there is less land to go around, but that problem is ultimately overpopulation, and that's an _entirely_ different topic.

You are forgetting the tax income from the money all those "tourists" spend in that country. Who do you think benefits from those taxes?

I do agree with you that it can befome a problem if those "tourists" start buying properties in those places. That should not be alowed without permanent residence (of, at least, a few years).

"That in turn drives up prices of everything for locals "===> Are you serious? Do you realise how many of these "tourists" (% wise) are needed to affect the market in a city? Even 1% is nothing more than a blip(IMHO).

No, because when your are on holiday it is not your place of employment.

All they want is if you are using somewhere as your place of employment, that you pay taxes that are due on earning that money in the country, the same as if your are employed locally. It's not unreasonable.

> Who do you think benefits from those taxes?

You can't pick and choose which taxes you want to pay and then say there is some 'benefit' for deigning to pay any at all.

Next time you stay in a hotel, try saying "I've shouldn't have to pay my bill, you should be grateful enough for the 'benefit' of the money I spent in the bar because I was staying here", and see how that works out.

If one or two digital nomads move in, the locals won't care much and the nomads will just become one of the types of people they have.

But if a town becomes infested with them, it can cause all sorts of issues (the nomads won't care about food prices because they can afford US prices, which are 10-100x what the locals have been paying, so prices can suddenly skyrocket).

Hell, you have it inside the country: https://www.mercurynews.com/2017/07/03/go-back-to-california...

And it's not always where you think it would be.

Tourism has done similar things to cities around the world; turning what used to be actual functioning cities into amusement parks for adults. Venice might be a good example, some say.

Also being from far away can lead to not knowing the area as well as you should and being disappointed.

I used to make the same argument, but it's just so convenient when it's easy to forget that there is a reason why income tax exists on top of VAT in the first place. And that's because VAT doesn't cover all of the budget expenses.

So you pay your hefty income tax back home, and only pay VAT on the products and services provided by (private) entities. The proportion of the budget not covered by VAT is covered by the locals and their income tax. That's not OK.

Same reason why the most touristy places impose additional tourist tax.

Though in my opinion this financial arbitrage is simply inevitable due to the housing market in Western countries being overinflated by investors.

You can't simply unilaterally declare that sales tax compensates for everything you do, and think laws don't apply.

and who is receiving these 10-100x'd prices? The locals who are providing value to the purchaser. Higher selling prices are profits in some locals' pocket/bank account. Why does this side of the equation never get talked about?

Yes I may make the price of a taco go up 20c, but that's 20c more profit for every taco sold at that price. The workers, the business, the real estate value, the whole supply chain can all now command a better price because of my "wasteful" spending relative to the context.

And yet, for some reason, a lot of people really dislike[1] H1Bs...

[1] Last election cycle, I've received a beautiful election pamphlet from a frothing-at-the-mouth state politician-want-to-be who spent most of his 250 words assuring me that H1Bs are robbing the country by mooching all of its services while not paying any taxes. He, uh, got 40% of the vote.

Yes he is. If the firm's willing to employ someone in Costa Rica, there's no reason it couldn't be employing a local.

Even if you're right that they're not a burden, which I disagree with since they do actually do enjoy services like police, fire department, mass transit subsidies, national defence, roads, clean air enforcement, etc, this is still not something you can unilaterally decide.

The laws are there whether you think they should be or not.

The country's state budget and its rules are not up to the individual to opt in and out of.

One of the biggest examples would be in real estate, where foreigners could be comparatively very wealthy compared to locals, and can thus out compete locals and dramatically raise the price of real estate.

This is why some jurisdictions that found that the amount of properties being purchased by foreigners was becoming startling have brought in foreign buyer taxes to try to even out the distortions in the economy and make it more fair for those who earn their incomes in the local economy.

(using Vancouver as an example, after the foreign buyer tax the city still has an incredibly low near 0% rental vacancy, which makes secondary home investment enormously profitable and continues to keep prices lofty)

This doesn't mean that it wasn't a good idea to address the foreign buyer problem, but it was clear that the system instantly shifted to compensate for the lack of foreign buyers, and new buyers appeared. There was plenty of local buyers, many of which had existing properties with inflated land values they could borrow against and the ultra low interest rates from the pandemic that aided them in bidding up properties to buy. Good for local buyers to have less foreign competition, no real change for local renters.

The most real direct outcome of the foreign buyer tax was the nature of the housing product that was made changed. Previously there were companies that were building "luxury" condos explicitly marketed as pied a terres to a foreign audience (largely from major cities in asia). Overnight this sort of thing went away and the same companies that were previously pushing these products instantly pivoted into building purpose built rental buildings for locals.

Ultimately I think the foreign buyer tax is good for local renters, but further work needs to be done.

It's not unusual for someone to use their HELOC to buy and 2nd or 3rd property and rent it out.

Of course with rising interest rates (and mostly variable mortgages) that's all coming home to roost now, al la USA in 2008.

The fact that there was significant amounts of foreign buying is not in contention. You can google Globe and Mail articles from ~2016 that cite these figures.

Not quite. They do bring money by buying things and paying sales/VAT tax. However, they don't pay income taxes because in 99/100 times they are not allowed to work, so they are illegal immigrants essentially.

They also come with their LA salaries and make renting/buying harder for locals.

I know people who do that in Thailand on tourist visa, and just have a short vacation every 90 days to qualify for new tourist visa.

While it may be the case in other countries, Mexico has fairly straightforward laws that allow you to work remotely for up to 4 years without paying local income taxes. Basically, as long as you have a stable job outside the country, you are fine.

The mood among some Mexicans may be negative, but for the most part Mexicans understand (thanks to a long experience with tourism) that foreigners bring in the big bucks. And this is good for us.

I write software for pay. That's it. I don't see my employer as a boss - they are a customer. If they aren't happy with the product, they can find someone else and I can respond to the other 50 LinkedIn requests...

I wouldn't work from e.g. Iran, or you could get sued to death when your customer is indicted for violating US sanctions, but yeah why would your employer care?

Oh, because maybe they have various insurance and partner contracts that speak about your physical location.

If your contract doesn't say where you are, then work from anywhere, and follow whatever laws.

If your contract does say where you are, then violate the contract an your own risk.

Mexico is really very lax about what you are allowed to do while in Mexico on an FMM and the fee for one isn't very much at all. But what you can't do is stay past the departure date on the FMM which cannot be more than 180 days from when it was issued. INM agents used to be very willing to just put the full 180 days on every FMM but lately are asking questions about your return plans and only giving you shorter time periods. Apparently there were a lot of people who were living in Mexico and basically going to San Diego at the end of their FMM, staying a few days, and then reentering on a 180 day FMM to return to where they live. This has always been against the rules but I don't think INM really cared that much until recently, because the number of people doing it increased greatly.

Our payroll app needs to know what days you are working from home. This way, if you work in one county and live in another, the county you live in will get their share of the income tax.

I think this is going to be a huge problem in a year or 2 when cities & counties see a large drop in income and try to figure out how to "fix" it.

The biggest risk is the remote country coming after the employee and/or employer. If you are the employer, and you are 100% sure you are never going to do business in the country, you MAY be ok. However, there are tax treaties at play as well and that can complicate things.

If the remote country goes after the employee, it may get ugly especially if the employee is still there. That indirectly also impacts the employer.

So if you or your employees are going to work from a different country, read their regulations and be very careful about staying longer than the time period that they consider you a resident for tax purposes.

This is quite an interesting space for some future startup.

Brazilian here. At least on the part of South America that I know that well (a little more than my country), nobody gives a shit.

Anyway, I'm not sure rent is high on those place (or rater specifically Mexico City) because of immigration. I can't imagine deciding to move to Mexico and picking specifically Mexico City instead of somewhere else (it would be like deciding to go to Brazil and insisting on living in São Paulo - people have many reasons for living there, remote working immigrants have almost none). At the same time, there are plenty of reasons to have expensive rents there that don't depend on immigrants.

Are the governments really that upset with illegal immigrants that (typically) don't commit crimes (aside from immigration/taxes) and spend (by local standards) crazy amounts of money in the local economy?

Imagine that you're running a pub. There's a regular that dresses funny, runs a small show, drinks like a hole, and at the end of the day, always runs out without paying his bill. He's stealing from you. However, there are many people who go to the pub just to watch his antics. The food and drinks he steals are nothing compared to the extra money you make from that.

You have every right to kick him out, and you might do it out of spite because you will not tolerate thieves... but the pragmatic thing to do is to look the other way, so it's not surprising when that's what happens.

Thailand explicitly gives out digital nomad visas for this?

I understand how that might eventually upend the local economy - it's called gentrification and while digital nomads certainly contribute to it, it surely can't be fully blamed on them. Places where people want to live at will eventually get gentrified in some shape or form.

The logic behind labeling digital nomads as illegal immigrants completely eludes me. I genuinely don't understand why you would make that assumption.

Close to 100% of them are on tourist visas and are explicitly not allowed to work in the country. What else do you think an illegal immigrant is?

Can you share the source for this data? I find it exceptionally difficult to believe.

I do not condone people doing anything illegal. But you can maintain the lifestyle of a 'digital nomad' while not breaking any laws whatsoever. I definitely do not believe that 'close to a 100%' of people would risk their jobs, the wrath of the tax man and potential prison time by not abiding by the relevant legislature, especially given that there are usually many available options.

But it entirely depends on local laws. Canada allows you to work for non-Canadian company that has no business in Canada. Things, a bit more complicated when you sell goods and services in Canada, though.

Spain has new digital-nomad visas that allow working in company that aren't in EEA. Before that, like many others EEA countries, they didn't allow working on tourist visa.

Yes. As we've been learning for 20+ years from the music industry. If you restrict easy access to what people want or make unrealistic demands, then people just side step you. But if you make it easy and accessible people happily pay.

Obviously the details vary, but frequently the terms are as egregious as

1. Regardless of length of stay we now want a % of your annual earnings

2. The process involved takes orders of magnitude longer than your stay

3. The typical legal fees involved is orders of magnitude greater than what you'll even earn in the time period, meaning your best alterative to "No" is actually to take time off, paid or unpaid

4. You're literally bringing them an opportunity so it feels unjust to be barred. An opportunity to have tourist income -- something that many countries _pay_ to compete for.

There will be a massive upside for the first country to have a safe desirable location, with fantastic internet, and visa policies that make sense in the above rubric.

It's not about whether you're working for a Mexican employer or not when you're in Mexico. It's about whether you're working at all.

Yes, but 'work' also has a legal definition. My research mostly involves Canada, so I will cite from the IIRC [1]:

"What kind of activities are not considered to be “work”?

    An activity which does not really 'take away' from opportunities for Canadians or permanent residents to gain employment or experience in the workplace is not “work” for the purposes of the definition.

- long distance (by telephone or Internet) work done by a temporary resident whose employer is outside Canada and who is remunerated from outside Canada;

...

We recognize that there may be overlap in activities that we do not consider to be work and those activities which are defined as work not requiring a work permit in R186. However, the net effect (no work permit required) is the same."

So yes, you can work remotely from Canada, while on a tourist visa, for a foreign (non-Canadian) employer.

A lot of OECD countries have treaties (look up 'double-taxation treaty between A and B'), that govern this.

1 - https://www.canada.ca/en/immigration-refugees-citizenship/co...

My point, which I also made in another comment in this thread, is that law isn't code.

If you spend 3-6 months every year on a tourist visa in Canada working for your US employer, Canada's going to cotton on eventually and take action. If you do it a few weeks a year, you'll likely be fine.

Their test is "are you directly or indirectly competing with a Canadian worker?". If your employer is really ok with you being abroad 3-6 months/year then they should, presumably, also be ok with hiring Canadians or legal permanent residents to do the same work 12 months/year from Canada.

>for your US employer

US/Canada have a very interconnected labor market, so in this context your comment is perfectly valid, and I would guess there are additional rules for this specific case. For literally any country other than US though, I don't see why it would be an issue for Canada or the country of origin, even if you do it repeatedly year over year.

Unless you're intimately aware of the intersection of tax and immigration law between Canada and every other country on the planet, that's a rash statement to make.

> Letting your employee be out of the country for 3-6 months every year on a tourist visa is a lot different from actually getting incorporated in that country and paying income taxes there.

Except that the company's responsibilities may extend far beyond just incorporating and paying income taxes. Every country's tax system is different and weird.

Companies don't require their employees to tell them their real address just to be mean, or to prevent labor arbitrage. They have genuine, legal reasons to do this.

If I go on a vacation and respond to a few work-related emails, am I breaking any laws because I'm working on a tourist visa? Yes, that is ad absurdum, but I'm trying to point out that it's not as clear cut. There is a line that international treaties define, and staying someplace (sometimes even up to 6 months) and working there doesn't necessarily have any income tax implications for you or your employer.

Law isn't code. Reasonable people (judges, normally) are able to decide what is "actually working" and "incidentally working while on vacation".

That can depend on how/where they're staying. If they're at "home" abroad, with a similar time zone, then there's often no way to tell except technically.

I have a team mate who often spends time across the border for weeks at a time. We wouldn't know if she didn't mention it.

We are in the EU though, so working from other EU countries is fine, within limits.

If you go too far of course, then your workmates might notice that it's winter when it should be summer.

And anyone with the login details can see where your login pings are from.

Now, it's hard to attend some meetings when time difference is very dramatic, like it's 1am in your local, but 10am at work HQ.

> If you go too far of course, then your workmates might notice that it's winter when it should be summer.

Doubt. Most of my co-workers use virtual backgrounds. I wear the same home clothes the entire year.

> And anyone with the login details can see where your login pings are from.

Good luck, I have a WireGuard box at my parent's house that I route my work traffic through when needed. Maybe I should start a business of hosting "residential" VPN exit nodes...

I am curious as to how. Working from home, no one has ever seen the inside of my home. Much less outside of my window.

The temperature of my office is stable through the year.

I can think of fashion colour schemes, makeup and tan. But that would require a lot of observation and not everyone changes those each seasons.

If all work is entirely work talk it would be easier.

To me, someone like that has demonstrated that they can’t be trusted and I would remove them from the business ASAP.

You can fix a lot of things with an employee/employer relationship, but those things require trust. You just don’t ever know where you stand with someone who lies.

From what I understand, that's most job interviews. If someone has very little practical coding skills, but is a LeetCode ninja, then you get what you ask for, I guess.

I don't lie, but it also seems to make me unpopular. Fortunately, I don't need the work.

[1] https://www.indonesiaevisas.com/news/digital-nomad-visa [2] https://nomadgirl.co/thailand-digital-nomad-visa-what-is-the...

I don't need to know anything about laws governing manufacturing to purchase a screwdriver made in California. I only need to know my own laws.

Is it legal to import screwdrives in my jurisdiction? Yes. Can I do this transaction without violating my own sanction laws? Yes

That's it.

Whether the California entity is allowed to sell to me is their problem, not mine.

The same applies for labor. I want to buy foreign labor? I negotiate the price, I get the work, I pay the invoice.

Which laws do I consult? Every potential country-to-country mix in the world?

No, I consult my own laws.

Is it legal to purchase foreign labor/services. Yes. Can I do this transaction without violating my own sanction laws? Yes

Whether I buy a website or a screwdriver - I do not need to know anything about who I'm buying it from beyond the necessary information to avoid international sanctions.

Also your employer needs to worry about this. And therefore you need to worry about your employer suing you.

If you think that's far fetched, do you think your employer will NOT throw you under the bus when France sues your German employer for turning a blind eye to where their employee is?

Frankly as a tech manager YOU are adding legal risk to yourself personally by protecting the employee from the company. Arguably YOU personally are complicit in tax fraud.

P.S. I used to be a lawyer and I can weigh the risks. Completely negligible compared to all the other risks I have as a founder.

As you say this is risk. You can make any tradeoff you want, and you are probably right.

You can hire someone you think may be working from Iran. You're pretty sure you won't get caught violating sanctions for it.

> I could not care less if they pay their taxes

I don't know LATAM employer side taxes, but if their tax offices do decide to target you then what you "could not care less" about will not matter much.

But shrug, yeah you probably won't get caught.

My favorite lawyer quote: "Legal didn't say we can't do it. Legal says if we do it then we may all go to jail. It's not the same thing".

And indeed it's not. But it's not trash.

France won't sue the German employer, If anything illegal occured, "France" will sue the person exporting the labor, not the person buying it.

The jurisdiction of France encompasses French people, and French entities.

If a law was broken in Germany about importing labor, then it's the German goverment enforcing the law.

Which only means you have to follow the laws of your own country only. Which includes your own countries sanctions, but doesn't include all countries sanctions.

You know that's not true, because you know that shoplifting in France applies to visitors too. Even if one tourist assaults another tourist. Or (in some other countries) two unmarried foreigners kissing in public.

People have had their children taken away while on vacation, because they beat them and local law did not like that.

If you think that France doesn't care about illegal workers within their borders then I don't really know what to tell you.

Different countries have different level of cooperation. I would not bet on an investigation in France about (alleged) organized tax fraud being "unable" to reach German defendants.

> France won't sue the German employer, If anything illegal occured, "France" will sue the person exporting the labor, not the person buying it.

Ok, good luck with that. I hope you got good lawyers advicing you on this risk, and defending you if it happens to you.

> Which only means you have to follow the laws of your own country only.

Like how Assange (Australian citizen) has no risk of being deported to the US to face charges based in laws only in the US, for something he allegedly did while in Europe?

The US doesn't deport its own citizens even to face charges of war crimes, so it may be a special case. But other countries do.

The grandparent comment (from aiisahik) is now replying to you about contractors.

For contractors I agree much more. But a contractor is not an employee (with a huge caveat, because depending on jurisdiction a contractor can be declared a de facto employee, and legally treated as such. It's a long and complex story).

Even from the article:

> “If an employee is in the wrong place long enough, it can have real tax implications for the company as well as the individual,” said Black, who added that many companies fear accidentally establishing a taxable presence in a foreign country.

This from a guy who "helps companies deploy and manage employees around the world" for a living.

And as the employer, I'm the importer of the labor so I don't care. If my contractor didn't pay their taxes that is not really my problem - they will just have to do deal with that themselves. What's very important is that I, as labor importer, didn't have to pay payroll taxes of the country where the labor was based. In the case of Argentina it's close too 100% of the salary. When i pay my contractor triple the average engineering salary they would get from a local country they are more than happy with this situation.

They can go after my contractors but then my contractors would just move to another country like Uruguay (which btw is very tax friendly towards remote workers and hardly charges any taxes). Some of my contractors have done exactly that.

"I don't understand. All I did was get up in the morning." line from The West Wing from a similar circumstance when the council threatened jail time for not reporting someone.