Contractor tax & payments by country
How an independent contractor is taxed, what legal form they invoice under, the VAT position, the payout rails that actually work, and how aggressively the country reclassifies contractors as employees — across 23 markets. Every row links to a full guide with sources and check dates. Built from our own country research, not a vendor feed.
CIS, Caucasus & Central Asia
| Country | Contractor legal form | Contractor tax | VAT | Payout rails | Reclass. risk |
|---|---|---|---|---|---|
| Armenia | Individual Entrepreneur (Անհատ ձեռնարկատեր) | IT/high-tech 1% turnover; other services 10% turnover; general 20% | — | SWIFT to an AMD/FX account (Ameriabank, Ardshinbank), Payoneer, Wise | Low |
| Azerbaijan | Individual entrepreneur (fərdi sahibkar / ИП) | Simplified 2% of turnover (≤ AZN 200k/12mo); or micro-business 75% profit exemption | 18%; registration above AZN 200,000 turnover | SWIFT (USD/EUR), Payoneer; Wise (send-only) | Low |
| Georgia | Individual Entrepreneur (ინდ. მეწარმე) with Small Business Status | 1% of turnover up to GEL 500,000/yr (Small Business Status) | — | SWIFT to a GEL/FX account (TBC, Bank of Georgia), Wise, Payoneer | Low |
| Kazakhstan | Individual Entrepreneur (ИП / Jeke kásipker) | Low simplified-declaration turnover rate (~3–4%; new 2026 Tax Code — verify) | — | SWIFT to a bank account (Kaspi dominant domestically), Payoneer, Wise | Low |
| Kyrgyzstan | Individual entrepreneur (жеке ишкер / ИП); LLC (OsOO) for High-Tech Park | ИП unified tax 4% cashless / 6% cash; HTP company 0% profit/VAT + 5% payroll PIT | 12%, registration above KGS 30M turnover | SWIFT (USD/KGS), Wise, Payoneer | Low |
| Moldova | Individual entrepreneur (II), independent activity, or SRL as IT Park resident | IT Park single tax 7% of turnover; standard PIT flat 12% | 20%; threshold raised to MDL 1.7M in 2026 | SWIFT (USD/EUR), Payoneer; Wise (send, no MDL payout) | Low |
| Ukraine | FOP (private entrepreneur), usually Group 3 | 5% single tax + military levy + unified social contribution | — | SWIFT to FOP account, Payoneer, Wise | Medium |
| Uzbekistan | Individual entrepreneur or self-employed (самозанятый) | 1% turnover from 2026 (up to UZS 1 bn); IT Park regime for IT | — | SWIFT to a bank account, Uzcard/Humo (domestic), Payoneer | Low |
Europe
| Country | Contractor legal form | Contractor tax | VAT | Payout rails | Reclass. risk |
|---|---|---|---|---|---|
| Estonia | FIE (sole proprietor) or OÜ (private company, often via e-Residency) | Flat 22% income tax; OÜ pays 0% on retained profit | 24% (from Jul 2025), threshold €40,000 | SEPA transfer (EUR), Wise, Payoneer | Medium |
| Germany | Sole proprietor — Freiberufler or Gewerbetreibende | Progressive income tax; trade tax only for Gewerbe; VAT 19% (Kleinunternehmer ≤ €25k/€100k) | — | SEPA credit transfer to an IBAN; SEPA Instant | High |
| Latvia | Self-employed (saimnieciskās darbības veicējs), microenterprise, or SIA | IIN 25.5%+ or microenterprise tax 25% of turnover | PVN 21%, threshold €50,000 | SEPA transfer (EUR), Wise, Payoneer | Medium |
| Poland | Sole proprietorship (JDG) on a B2B contract; CEIDG-registered | Ryczałt 12% for IT programming (or 19% flat / progressive) | — | Elixir / Express Elixir (PLN), SEPA (EUR) | Medium |
| Portugal | Trabalhador independente («recibos verdes») | IRS via simplified regime (coefficient); social security 21.4% | Exempt below €15,000 turnover (Art. 53 CIVA) | SEPA transfer (EUR), Wise, Payoneer | High |
| Serbia | Entrepreneur (preduzetnik), usually flat-rate (paušal) | Paušal: 10% on a notional base + ~35% social on a base | — | Bank transfer (EUR/USD) to a foreign-currency account | High |
| Spain | Autónomo (self-employed, registered in RETA) | IRPF (progressive) + RETA social contributions ~31% | IVA 21% (quarterly modelo 303) | SEPA transfer (EUR), Wise, Payoneer | High |
| Switzerland | Own AHV/IV/EO contributions; VAT above CHF 100k turnover | Own AHV/IV/EO contributions; VAT above CHF 100k turnover | — | Bank transfer to CHF IBAN; EUR via SEPA where agreed | High |
Middle East
| Country | Contractor legal form | Contractor tax | VAT | Payout rails | Reclass. risk |
|---|---|---|---|---|---|
| United Arab Emirates | Free-zone freelance permit or MOHRE self-employment permit | No personal income tax; 9% corporate tax only above AED 1M turnover | 5% above AED 375,000 turnover | Bank transfer (AED/USD), Wise, Payoneer | Low |
Americas
| Country | Contractor legal form | Contractor tax | VAT | Payout rails | Reclass. risk |
|---|---|---|---|---|---|
| Brazil | PJ: MEI or ME under Simples Nacional, with CNPJ | — | — | PIX (instant, universal), platform payouts in BRL | High |
| Canada | — | T2125 business income; GST/HST registration above CAD 30k | — | EFT, Interac e-Transfer (domestic), platform payouts in CAD | Medium |
| Latin America | PJ entities (Brazil), RFC/CFDI (Mexico), monotributo (Argentina) | — | — | PIX (Brazil), SPEI (Mexico); bank transfers elsewhere | High |
| Mexico | — | SAT registration (RFC), CFDI invoices; RESICO ~1–2.5% ≤ MXN 3.5M | — | SPEI (instant interbank), platform payouts in MXN | High |
Asia
| Country | Contractor legal form | Contractor tax | VAT | Payout rails | Reclass. risk |
|---|---|---|---|---|---|
| India | Sole proprietor/freelancer under PAN; GST above ₹20 lakh | Business income; 44ADA presumptive 50% profit up to ₹50 lakh (₹75 lakh if ≤5% cash) | — | SWIFT wire (FIRA trail), Wise, Payoneer; UPI is domestic-only | Medium |
| Philippines | — | BIR self-employed registration; optional 8% flat tax ≤ PHP 3M gross | — | Bank transfer (InstaPay / PESONet), GCash, Maya | Medium |
How to read this table
- Contractor tax is the headline regime a solo contractor typically uses, not their full effective rate — social contributions, thresholds and progressive bands live in each country guide.
- Reclassification risk is our qualitative read of how actively the country recharacterises contractors as employees (Low / Medium / High). High-risk markets — Spain, Portugal, Germany, Brazil — enforce hard; low-risk CIS and Gulf markets rarely pursue foreign clients.
- This is general information, not tax or legal advice. Rates change; the dated sources are in each guide.
Deciding between engaging a contractor, a Contractor of Record or an Employer of Record? See the country hub and our misclassification primer.