Tax Residence in the Era of e-Residency and Digital Nomads: International Experience and Ukrainian Context

Анотація

This article features in detail the understanding and definitions of e-residency and digital nomadism and how these affect the tax status of these people over time. With the help of countries like Croatia, Spain, Brazil, Portugal, and Estonia, it investigates into the legal and theoretical sides related to how a person not being a resident can obtain, hold, and give up e-residency and digital nomadism.In 2014, Estonia was the first country to introduce the concept of e-residency. This is the type of legal status that permits the individual to use a country’s software infrastructure without becoming a tax subject within that country. Digital nomadism, such as performed by high-skilled workers who can move their job to any place with an internet connection and travel visa often offered via special digital nomad visas, is related to the same phenomenon. Still, notwithstanding the peculiarities of these reforms promotion and the legal effectiveness of e-residence and digital nomadism, their taxation residency is still stuck to the conventional rules of taxation residency of e-residents and digital nomad which resident taxes are usually influenced by factors like the time spent in a country or where income is generated among other metrics unless distinctively specified under domestic law or international tax agreements.The research focuses on how e-residency and digital nomad visas, while being valid instruments of economic progress, do not change a person’s tax status in his country of actual residence except where the local law provides for such provisions. In this case, an individual who has e-residency in Estonia or has a digital nomad visa in Croatia would, in most cases, be treated as a resident of the country where this person is located and be subject to relevant taxes despite avalable tax reliefs guaranteed by countries grantingthis digital nomad visas.Building upon the experiences of these foreign jurisdictions, the article provides suggestions on how the terms digital nomad and e-resident can be embedded into the legislation of Ukraine. The establishment of these regimes is seen to be vital in the digital economy reconstruction of Ukraine after the war as they would bring in foreign skills, money and talent. Suggestions include the establishment and regulation of the tax status of e-residents and digital nomads so that the principles of best practices are observed to prevent the occurrence of dual taxation and encourage external investors.In the same viewpoint, the article underlines the significance of these mechanisms for global labor migration flows and considers the issues of labor migration in a global economy more widely. The legal issues involving e-residency, digital nomadism and tax residency bring to the fore the need for new tax.

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