Legitum
Living abroad in the EU can offer better quality of life, lower costs, and unique cultural experiences. But without proper tax planning, it can also lead to double taxation, audits, or financial penalties. Fortunately, there are legal strategies that can help you optimize your tax situation while staying compliant.
Understand Your Tax Residency
Each country defines tax residency differently — often based on number of days, primary home, or economic interests. You may qualify as a tax resident in more than one country, triggering global income reporting. Knowing where you are legally resident is the first step.
Leverage Tax Treaties
The EU and most developed nations have double taxation treaties in place. These allow you to offset taxes paid in one country against obligations in another. But these treaties are complex and require expert interpretation to use properly.
Use Special Expat Tax Regimes
Countries like Portugal (NHR), Italy (flat tax for high-net-worth expats), and Greece (foreign pension incentives) offer favorable tax regimes for newcomers. These can significantly reduce income tax, but only if you apply correctly and on time.
Structure Income Efficiently
If you're self-employed, a digital nomad, or a business owner, you may benefit from structuring income through companies or trusts in tax-favorable jurisdictions — legally. However, misuse can trigger anti-avoidance rules. Seek legal guidance.
Plan for Retirement and Inheritance
Many forget that pensions, property, and inheritance are taxed differently across countries. EU inheritance tax, pension withdrawals, and foreign-held assets need proactive legal planning to avoid unexpected bills for you or your heirs.
Stay Compliant with Reporting
EU countries are increasingly sharing financial information under the Common Reporting Standard (CRS). You may need to report foreign accounts, income, or crypto assets. Failing to do so can result in heavy fines or criminal charges.
Conclusion
Tax optimization isn’t about evasion — it’s about strategy. At Legitum, we help expats and international clients create clear, legal frameworks to enjoy their life abroad without tax headaches.