There are no EU rules that say where people who work or live in another EU country have to pay tax on their earnings.
The country where you are resident for tax purposes usually levies taxes on all your income worldwide, whether you worked for it or not. This concerns wages, pensions, benefits, income from real estate and other sources of income, but also any profit on the sale of real estate.
Warning
EU countries regularly exchange information to ensure taxpayers meet their obligations and to fight tax life insurance fraud and evasion. The tax authorities in your place of residence or your country can provide you with more information about taxes on real estate, gifts and inheritances.
Each country fills in the concept of “tax residence” itself.
- Normally, your tax residence is in the country where you reside for more than six months a year .
- You usually keep your tax residence in your own country if you stay in another EU country for less than six months a year.
Information about tax rates, contact details of tax authorities and definitions of tax residence in the different EU countries:
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Dual residence
Sometimes you are considered a tax resident by two countries at the same time. Both could then make you pay tax on your worldwide income. To prevent this, many countries have concluded treaties on double taxation . This usually contains rules that determine where you will ultimately be assessed.
If such a treaty does not offer a solution for your situation because it is very complicated, you can contact the tax authorities of (one of) the two countries and ask about your situation.
Posted workers and job seekers
Sometimes you are considered a tax resident of your own country, even if you have been living abroad for more than six months. This is the case if you maintain your permanent residence in your own country and your personal and economic ties with your own country are stronger, for example because you are posted abroad as an employee for a short time or are looking for work abroad . In such a case, contact the tax authorities to see which rules apply to you.
In such a case it is possible that your host country levies tax, for example by already having your employer withhold income tax from your wages.
In addition, your own country, whether you actually live there or not, can also levy tax on your income (for example from property) there.
But there are solutions to prevent double taxation so that you do not pay tax twice on the same income .
Fictional tax residence
According to some tax treaties , the country where you have (almost) all your income must treat you as a tax resident, even if you do not live there. In some countries, frontier workers are given such a fictitious tax residence.
EU rules give each country a certain margin to define what is meant by “almost all your income”. But regardless of whether the country where you earn (almost) all your income treats you as a tax resident or not, you are in any case entitled to the same exemptions and deductions as real residents of that country.
But if you already benefit from certain exemptions and deductions in the country where you work, you cannot expect that you will also receive them in the country where you live. The tax authorities will therefore exchange information to ensure that you do not benefit twice from exemptions and deductions.
Equal treatment
Under EU rules, you must be taxed in the same way as a country’s own nationals, regardless of where you are considered a resident for tax purposes. For example, in the country where you have to pay tax or where you have almost all your income, you are entitled to:
- family benefits and tax deductions for childcare costs, even if those costs are incurred in another EU country
- any tax deduction for mortgage interest, even for your home in another EU country
- a joint tax assessment with your partner, insofar as that is possible there,
