From remote work to digital nomads: tax issues and tax opportunities of digital lifestyle

IFAC-PapersOnLine. 2021. Vol. 54. No. 13. P. 188–193.

Tyutyuryukov Vladimir, Guseva N.

With spread of remote work, digitalization of economy and gig economy, a new class of entrepreneurs arose – digital independent workers. Its ulterior form so far is digital nomads, who travel the world with limited or no fixed abode – and this is not a marginal group. Existing tax rules based on residence criteria do not suit these well: remote work severs ties between budget revenues from personal income tax and budget spending on local infrastructure, gig economy disrupts PAYE system, and digital nomads are at risk of being tax residents nowhere, and may not enjoy the same tax regimes as regular settled employees. This paper estimates the tax potential of digital independent workers, reviews their income structure, personal tax issues related to digital lifestyle and the solutions various countries employ to tax the income of these digital independent workers. The PAYE taxation of income of digital independent workers proposed by Russian politicians and internet companies seems to disregard the variety of that income. Digital independent workers prefer to register as sole proprietors or self-employed and enjoy special tax regimes where possible, but further research is necessary to manage their tax behavior, improve relevant tax control and solve double taxation issues.

Keywords: Налог на доходы физических лиц, сравнительное налоговое право, comparative tax law, digital nomads, цифровые кочевники, онлайн-платформы, personal income tax, online platforms, гиг-экономика, налогообложение в условиях цифровой экономики, gig economy, digital economy taxation model