Digital Nomads 7.12.22

The global world of employment has changed its perception of everything during COVID-19, dictating new work habits. Working from home and zoom meetings required us to reconduct our living environment accordingly.

Many employees found themselves isolated, without any social interactions for a long period of time, which caused them to ask – how can one continue to develop professionally and create business relationships in this “new” world?

The past two years have shown us that many occupations offer the option of working from anywhere without depending on a physical base. Globalization, along with the availability of WIFI has created ‘digital nomadism’, a relatively new term that describes the lifestyle of ‘working on the go’ from anywhere around the world.

Digital nomads are unexceptional employees, some of them working for companies from their country of origin and some for international companies. They are successfully combining work and pleasure, while saving money by working from destinations where the cost of living is low compared to the high salary they earn. These employees have a very high level of self-discipline since they are required to manage time and set priorities more than in a permanent local place.

Many professions are a part of the ‘digital nomadism’, such as: consulting, communications, IT, web design, digital marketing, content writing and more.

Digital nomadism has raised the issue of taxation since living in one country for less than a year and then moving to another, whilst working required the right tax classification. The main question that arose is whether a digital nomad can be considered as a foreign resident, and how does one report to the Israeli tax authorities?

It is very important to know that as long as the digital nomad is not considered a tax resident in Israel, he will not be liable to tax on his income from abroad, while a digital nomad that is classified as a tax resident in Israel will be liable to tax of for all of his income from abroad and may be entitled to a tax deduction on certain expenses.

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