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Comment by firechickenbird | Hacker News Reader

Considering moving in Bulgaria after this, thanks!

My Freelance taxes/social sec/retirement tax in Italy is on average 76% on a total of 80k eur average gross annual income (98th income percentile).

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Come to Albania, should be easier for italians. Assuming you work remote, no taxes until ~$120K, then it's 15% of profit.

On your wage, you'll pay $50/month economist + $80/month health/pension + $80/month municipal taxes.

These taxes changed this year. Previous year it was 5% if you pass $50K and 15% if you surpass ~$120K.

The only drawback is that insurance companies don’t insure your car inside Albania for whatever reason.

Can you be more explicit ? Minimum car insurance is mandatory, and you can pay for full insurance if you want.

Full insurance in European Union often has explicit exception for Albania if you bring your car from there.

If you live in Albania you'll have to do the local insurance. I dont know how it is with foreign license plate.

Albania also has great sea, amazing food and welcoming people

Do you have a source for this?

You can see here: https://www.tatime.gov.al/eng/c/4/96/107/income-tax

The thing is that remote programming is considered "export" and export has no VAT. The numbers above are literally the taxes I paid in 2021 & 2020 (I paid the 5% of profit tax on 2020). I may have missed any small thing like $14/month for electronic signature & software. Mostly less than $500/year in all other things combined.

Edit: By "taxes changed this year" on parent comment, I meant in 2021. Not in 2022.

Taxes at that income level are around 50%, including ~20k worth of social security contributions. You're probably mixing up VAT, advance payments and final balance payments to get to that 76%, which is NOT what you're really paying on your income, unless your accountant made some major mistake.

BTW, if you invoiced 65k instead of 80k, you could use the "forfettario" tax regimen, which would result in a higher net income (yes, it's that crazy: you earn more if you earn less).

Do you mean you'll only make 19.2k net from 80k gross? That sounds like an awful amount of taxes. I'm from Austria and here it's ~27% for social security and income tax is ranging from 0% to 55%. From 80k gross you would make around 42k net (Calculated without any tax benefits).

He is probably adding VAT to his income tax rates, which imo is not correct.

Why not?

VAT is typically charged to customers and then compensated with the VAT you pay if you as a freelancer have expenses.

For instance in Spain I have to increase my clients invoices by 21%, but if those invoices are for software, you have almost no purchases to offset that, so I need to pay that 21% quarterly.

So to earn 50k€ in net terms, I would need to charge 25k€ extra just on income tax, plus 3.5k€ on direct taxes on freelancing (because Spain), plus 21% VAT.

It’s no wonder the south of Europe does poorly.

Is vat not a tax? I think every government cost that is a percentage of income or spending should be calculated as your expense for the government. I think inflation also should be kept in mind as it is a hidden tax. Maybe harder to calculate.

VAT is a tax on consumption. But it is only levied when you take a certain action with your funds -- i.e. consume it. You could also (re)invest and let your capital compound.

So yes, if you spend all your money to the last penny, that would be your tax rate. But many (higher income) people do not.

But all your income is meant to be spent. All people invest so they get to buy more in the future, not for the sake of it. If you don’t pay VAT today, you will in the future.

VAT is added on top of your invoices. It's paid by the end user to the government. It only passes through you.

When I measure my revenue, I always leave VAT out. It was never my money.

Maybe is just me but paying 76% taxes is dystopic. The economics of slavery are not that far.

Developers in many developed countries (Germany, Belgium) are in ~50% effective tax bracket for the salary, add there company paid taxes for the 'salary budget' or whatever it called properly and you certainly in ~60% territory.

> My Freelance taxes/social sec/retirement tax in Italy is on average 76% on a total of 80k eur average gross annual income (98th income percentile).

If you have a profit of 80k and your net income is 19k, you're doing something very wrong. This is not an accurate representation of Italian taxes and social security. A more reasonable net income for that gross is 40k; but you have to take into consideration that with around 24k of the other 40k you are paying a pension (not a very generous one, but still).

Try Romania - lower taxes, see my previous comment, higher standard of living and there's a small but decent size italian community here.

Actually go for Lithuania or Malta - even lower taxes than Romania and even higher standard of living (especially Malta)

While I am not so sure about Lithuania (lower GDP per capita than Bucharest, Bucharest being twice as developed as the rest of Romania, ibm, google, amazon, microsoft all having offices here with pay comparable to germany as a backup plan - could be wrong, but it sure is colder), Malta is now an option considering your comment - had no idea taxes are low in that country. Working from near a beach is the dream tbh.

> While I am not so sure about Lithuania (lower GDP per capita than Bucharest ...)

Why are we comparing a country with a city in GDP per capita terms? And is this meant to imply that standard of living is higher in Bucharest than, say, Vilnius?

I would assume two cities with similar GDP per capita (as Vilnius and Bucharest) can have wildly different standard of living depending on many other factors.

I can only speak about Bucharest as that's the area I know best. From what I see it has a slightly higher GDP per capita than Lithuania, and if you factor in the metro area, Bucharest has the same population as the country.

"And is this meant to imply that standard of living is higher in Bucharest than, say, Vilnius?"

Statistically, it is, albeit by a small margin. There is also Cluj Napoca (Romania's second or third largest city, similar size to Vilnius), also at a higher standard of living than both, but I don't know much about that city. Outside these two, Romania is a wasteland.

Edit: Interesting:

Vilnius is the major economic centre of Lithuania. The GDP per capita (nominal) in Vilnius county was €25,400 (~US$30,000)[285] in 2019, making it the wealthiest region in Lithuania and the second-wealthiest region in the Baltic states.

Almost one third of national taxes is paid by Bucharest's citizens and companies. In 2009, at purchasing power parity, Bucharest had a per-capita GDP of €26,100, or 111% that of the European Union average and more than twice the Romanian average.

So likely Bucharest's GDP per capita is higher by a wider margin.

Edit 2: The region Bucharest-Ilfov is the most developed region in Romania, with a GDP per capita of 139% of the European average. Bucharest thus surpasses other European capitals such as Athens, where the GDP per capita reaches 92% of the EU average, Madrid (125%), Berlin (118%), or Budapest (102%).

https://rumaenien.um.dk/en/the-trade-council/about-romania

If standard of living is purely defined as GDP per capita, then it makes sense.

I was thinking of "standard of living" as something akin to "quality of life" (which is subjective of course, but here are a couple of rankings placing Vilnius above Bucharest [0][1][2][3]). Also, for someone working remotely, a lower GDP per capita (assuming good infrastructure, low inequality/poverty/crime and corruption, etc. which are true in Vilnius, at least) might be preferable.

That being said, I think the trend for most of these statistics (GDP, HDI) for Lithuania vs Romania (or Vilnius vs Bucharest) seems to favor the former as well.

e.g. Vilnius county went from 0.861 to 0.920 HDI (0.59 delta) between 2009 and 2019; Bucharest went from 0.898 to 0.933 HDI (0.35 delta) in the same time period [4]

[0] https://mobilityexchange.mercer.com/Insights/quality-of-livi...

[1] https://www.numbeo.com/quality-of-life/rankings.jsp

[2] https://worldhappiness.report/ed/2020/cities-and-happiness-a...

[3] https://ec.europa.eu/regional_policy/en/information/maps/qua...

[4] https://globaldatalab.org/shdi/shdi/LTU+ROU/?levels=1%2B4&in...

Quite interesting - didn't consider going beyond the GDP per capita.

> but here are a couple of rankings placing Vilnius above Bucharest [0][1][2][3]

informative, thanks for this!

> HDI

dang, i didn't consider looking into HDI. not sure how it's measured but it places bucharest-ilfov on par with parts of the UK and east switzerland?

https://globaldatalab.org/shdi/shdi/ROU+CHE+GBR/?levels=1%2B...

Either way you are right, quality of life is subjective. I don't particularly enjoy life here overall, just taxes and the group of friends I have. Romania is far behind central and western europe in terms of mindset, but is nowhere near the low level i thought it was.

Unless you invoice more than ~120k€ it's generally more convenient, if possible, to cap your work/earnings at 65k€ and pay less taxes, less social security contribution, and no VAT

Yes, if you want to only pay around 50% (which is still insanely high) in taxes there is a 65k eur gross cap.

Once you make 1 cent more, you get hammered with 76+%.

Depending on your age and how much you can deduct, the switch over can come as "low" as 90k. At 100k you should always be ahead in any case. And that's without counting the social security contributions. Depending on how you value them, it might be more convenient even under <90k.

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