International Freelancer Tax Basics: A Multi-Country Overview

The Multi-Country Challenge

Freelancers who work with clients in multiple countries face unique tax challenges. You need to understand where you owe taxes, whether VAT applies, and how to avoid being taxed twice on the same income.

Tax Residency Is Everything

Your tax residency determines which country has the primary right to tax your worldwide income. Most countries use a 183-day physical presence test, but some consider additional factors like center of vital interests and habitual abode.

Double Taxation Treaties

Over 3,000 bilateral tax treaties exist worldwide to prevent double taxation. Common relief methods:

Exemption method: Income taxed in one country is exempt in the other

Credit method: Tax paid abroad is credited against domestic tax liability

Deduction method: Foreign tax paid is deductible as an expense

VAT for International Freelancers

EU Freelancers

If your annual turnover exceeds the VAT threshold in your country (varies by country), you must register for VAT, charge VAT on domestic sales, and file periodic VAT returns. The reverse charge mechanism applies to B2B services across EU borders.

Non-EU Freelancers

Generally, services provided to EU businesses are not subject to your local VAT. However, digital services to EU consumers may require VAT registration through the One-Stop Shop (OSS) system.

Key Country Rules

US: Self-employment tax 15.3% plus income tax. Worldwide taxation for citizens.

UK: Class 2 and Class 4 NIC plus income tax. Register for Self Assessment.

Germany: Freiberufler status for qualifying professions. No Gewerbesteuer for liberal professions.

France: Micro-entrepreneur regime for income under 77,700 EUR. Social charges approximately 22%.

Netherlands: Freelancers (ZZP) can use the zelfstandigenaftrek deduction of 3,750 EUR.

Taxation.ai supports multi-country tax filing and automatically applies treaty benefits to minimize your global tax burden.