Hello everyone,
I’m curious about how the tax-free personal allowance functions in situations involving double taxation agreements.
For instance, if I’m self-employed in the UK for part of the year within the tax-free personal allowance and then work self-employed in another EU country, would the EU country expect me to pay full local tax on my UK earnings, considering I haven’t paid tax there due to being within the tax-free allowance?
I have read sources that say that earnings within the tax free personal allowance is still actually taxable income at the rate of 20% or so but the personal allowance just means you don’t have to pay it.
Thank you all in advance
If you’re tax resident in two countries the tax free allowance in the other country doesn’t matter. Unless a tax treaty changed how the taxes are distributed.