There are no EU-wide rules that say how EU nationals who live, work or spend time outside their home countries are to be taxed on their income – coming from wages, pensions, benefits, property, successions and donations, or any other sources.
There are only national laws and bilateral tax treaties between countries – and these don’t cover all eventualities and vary considerably.
However, there are some basic principles that apply in most cases to people who spend time in EU countries outside their home country.
There is a risk that your income may be taxed twice if two countries have the right to tax your income because, for instance:
- You live in one EU country but work in another (cross-border commuter)
- You areposted abroad for a short assignment
- You are living andlooking for work abroad and have transferred unemployment benefits from your home country
- You haveretired to one country and receive a pension from another
In these situations, while you will always be subject to the tax rules of your country of residence, you may also have to pay taxes in the other country.
Fortunately, however, most countries have double tax agreements .
These agreements usually spare you from double taxation:
- under many bilateral tax agreements, the amount of tax you paid in the country where you work will be offset against the tax you owe in your country of residence
- in other cases, the income earned in the country where you work might be taxable only in that country and exempt from tax in your country of residence
You should note that the tax rates in the two countries involved will most likely be different. If the tax rate in the country where you work is higher, that is the final rate you will pay – even if the tax paid in that country is offset against the tax due in your country of residence, or if your country of residence exempts you from any further tax.
In order to claim relief from double taxation you may need to prove where you are resident and that you have already paid taxes on your income. Check with the tax authorities what proof and which documents you need to submit.
For information about taxes on unearned income in the country where you are tax resident (e.g. property taxes, local taxes, gift and inheritance taxes, etc.) consult the local tax office.
This information is to be used as general guidelines and may not be updated to meet the current requirements. Before you travel, be sure to contact the appropriate authorities.