Digital Nomad Taxes: Best Tax Bases in Europe
In this blog post, you’ll find information about some of the best places to base yourself as a digital nomad or remote worker in Europe when it comes to taxation rules: Bulgaria, Cyprus, Malta, Estonia and Andorra.
What is the challenge with taxes as a Digital Nomad?
As a digital nomad, you travel around and you typically never stay longer at a destination than 3-4 months maximum.
This poses somewhat of a grey zone in the tax world, because in most countries, you are only tax eligible if you stay in a country for 6 months or longer (at least in EU countries; there are some exceptions elsewhere).
Now, as a citizen of any country, you are required to pay tax somewhere, especially if you have a business, but also, if you have a remote job. Let’s explore some taxation options for Digital Nomads in the EU.
Disclaimer
Note that I am no expert in this area but because I have done some research over the last few years and have spoken to a few experts, I wanted to share my learning from my perspective as an (occasional) Digital Nomads and full time remote employee.
If you need specific and professional advice, I would recommend you to seek out a taxation specialist.
Also, be aware that tax residency is something different than a digital nomad visa.
Bulgaria
📊 Tax Rates
Personal income tax: Flat 10% on all personal income — one of the lowest in the EU.
Corporate tax: Flat 10% for companies.
Dividend tax: Typically 5%.
VAT: Standard 20% (reduced 9% for some items).
📆 Tax Residency Rules
You generally become a tax resident if you stay 183 days+ per calendar year.
As a non-resident (stay <183 days), you are usually only taxed on Bulgarian-source income.
👍 Pros
Very low flat tax on both personal and corporate income — attractive for entrepreneurs and high earners.
Simple tax system with less complexity compared to progressive systems.
As an EU member, access to a stable economic environment and double taxation treaties reduces the risk of double tax.
Lower cost of living compared to many Western European countries.
👎 Cons
If you become a tax resident (183+ days), your worldwide income is taxed at the flat rate — which can catch some digital nomads off guard.
Social security and healthcare contributions can add to overall tax burden (not included in the simple flat rate).
👉 Check out my Digital Nomad Guide for Sofia!
Cyprus
📊 Tax Rates
Personal income tax: Progressive — from 0% up to 35%; first €19,500 tax-free.
Corporate tax: Around 12.5% (one of the lower corporate rates in the EU).
Dividend tax: Often 0% under certain non-dom and business conditions.
VAT: Standard ~19% (some reduced rates).
📆 Tax Residency Rules
183 days rule: Standard EU approach — stay 183+ days to be tax resident.
60-day rule: You can become a tax resident with just 60 days in the year if you meet certain criteria (no longer tax resident elsewhere, have ties to Cyprus like business or property, etc.).
👍 Pros
Tax-free threshold: First €19,500 personal income not taxed.
Attractive corporate and dividend tax treatment compared to many EU countries.
Part of the EU, with good connectivity, English-friendly environment, and stable legal framework.
Double tax treaties with many countries reduce risk of double taxation.
👎 Cons
Progressive personal tax can be high at top rates (up to 35%).
Must often prove strong ties (business, property) for the 60-day rule.
Cost of living/healthcare can be higher than in Eastern Europe.
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Malta
📊 Tax Rates
Personal income tax: Progressive up to 35% — but digital nomads may benefit from special treatment: first 12 months of foreign-sourced remote work may be exempt, and afterwards taxed at ~10% on authorised work.
Corporate tax: Nominally 35%, but many foreign companies receive credits/refunds reducing effective rates to around 5–10% depending on structure.
VAT: Standard ~18%.
📆 Tax Residency Rules
Digital nomads must generally live and work in Malta and eventually be considered residents for tax after extended stays. The Nomad Residence Permit usually requires staying at least 5 months per year for renewal.
👍 Pros
First 12 months exemption on foreign earned remote income — unique benefit for nomads.
Effective corporate tax can be low via refund mechanisms.
Strong network of double taxation agreements.
English is an official language; excellent connectivity and quality of life on a Mediterranean island.
👎 Cons
Without special planning, personal income and social security can be high compared with simpler flat tax countries.
Exemption applies mainly to remote work outside Malta; income earned locally (e.g., rental) is taxed at progressive rates.
Residency rules require significant time living in Malta — more commitment than some nomad visas elsewhere
Estonia
📊 Tax Rates
Personal income tax: Flat 22% (as of 2025).
Corporate tax: 22% on distributed profits — no tax on undistributed profits (profits left in the company are tax-deferred).
VAT: Standard ~24%.
📆 Tax Residency Rules
If you stay 183+ days in a year, you are generally considered a tax resident and taxed on worldwide income.
Estonia also offers an official Digital Nomad Visa (Type D) valid for up to 1 year for remote workers, with specific income requirements (e.g., minimum income threshold).
👍 Pros
Corporate set-up with tax only on distributed profits can be highly advantageous for reinvestment and startups.
Straightforward flat personal tax simplifies planning.
Excellent e-government services and digital infrastructure.
👎 Cons
Flat 22% personal tax is higher than Bulgaria’s and some other low-tax EU options.
Standard residency rules (183 days) still apply — careful planning needed to avoid unintended tax residency.
VAT is relatively high; social taxes for workers can be significant even if not directly tied to income tax.
Andorra
📊 Tax Rates
Personal income tax: Progressive but very low, ranging from 0% up to 10%
Corporate tax: capped at 10%
VAT: around 4.5%
📆 Tax Residency Rules
To become a tax resident, you generally need to spend at least 183 days per year in Andorra.
There are different residency options, including active residency (for people working or running a business in Andorra) and passive residency (often used by entrepreneurs or remote workers with foreign income)
👍 Pros
Extremely low personal and corporate tax rates compared to most European countries
High quality of life, safety, and excellent nature (mountains, skiing, hiking)
Low VAT, which keeps everyday expenses relatively affordable
Stable political and economic environment
Attractive for freelancers, consultants, and business owners with international clients
👎 Cons
Not part of the EU or Schengen, which can complicate travel and bureaucracy
Smaller international community compared to major digital nomad hubs
Residency comes with financial requirements (minimum income, deposits)
Less suited for people who enjoy large cities or a vibrant nightlife
Sources for this blog post:
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