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 regular income tax | 18%; registration above AZN 200,000 turnover | SWIFT (USD/EUR), Payoneer; Wise (AZN to a local bank account) | 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) | 4% of income on the simplified declaration (2–6% where the local council has moved the rate) | — | SWIFT to a bank account (Kaspi dominant domestically), Payoneer, Wise | Low |
| Kyrgyzstan | Individual entrepreneur (жеке ишкер / ИП); High-Tech Park open to LLCs (OsOO) and ИП | ИП unified tax 2% cashless / 4% cash for software development (4% / 6% for most other services); HTP resident 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 IT Park resident (SRL or II) | 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), individual merchant (IK), 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 in Portugal (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 freelance work permit | No personal income tax; once turnover exceeds AED 1M, 9% corporate tax on taxable income above AED 375,000 | 5% once taxable supplies and imports over the past 12 months exceed AED 375,000 | Bank transfer (AED/USD), Wise, Payoneer | Low |
Americas
| Country | Contractor legal form | Contractor tax | VAT | Payout rails | Reclass. risk |
|---|---|---|---|---|---|
| Brazil | PJ with a CNPJ: usually an ME under Simples Nacional (MEI is closed to IT work) | — | — | 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.