Mr. Xavier Chan, Chairman of CWK Global, and Ms. Evy Wong, the Principal Partner of the Tax & Advisory Department of CWK Global, recently participated in an interview with Ming Pao regarding tax issues related to digital nomads. Mr. Xavier Chan highlighted that digital nomads, as an emerging lifestyle, have some grey areas in terms of taxation. Ms. Evy Wong pointed out that tax requirements and types vary in different regions, and digital nomads need to understand whether they need to pay taxes in Hong Kong. Ms. Evy Wong also suggested individuals check whether their respective locations have signed a “Comprehensive Avoidance of Double Taxation Agreement” with Hong Kong. These agreements often outline specific criteria, such as a maximum number of days spent abroad, to determine tax residency. In the absence of such agreements, individuals may be liable for taxation in both jurisdictions.
In order to cope with this emerging lifestyle, more than 40 countries around the world have launched “Digital Nomad Visas” specifically designed to address tax and visa-related concerns. In principle, it is illegal to work abroad on a tourist visa, but these exclusive visas allow digital nomads to work legally in the host countries, while also making it easier for tax authorities to track the number of people earning income in this way. Some places have even introduced preferential measures, such as partial tax reductions or temporary tax exemptions, to attract talent.