Working in a Foreign Country as a Contractor: What Records You Must Keep

Two tax systems, one set of records

When you work as a contractor in a country that isn’t your home jurisdiction, the question of where you owe tax becomes a factual question with real financial stakes. Most countries determine tax residency partly by physical presence — the widely-used 183-day threshold. But the calculation isn’t just days; it’s documented days. What you can prove about when you arrived, when you left, and how much working time you spent in each country determines how each jurisdiction treats your income.

A contractor who split time between Spain, Germany, and the UK over a calendar year and has a contemporaneous record of their working days in each country is in a fundamentally different position than one reconstructing their travel from email timestamps and bank transactions after an audit opens.

The record doesn’t decide the tax outcome. It’s the input to the calculation that decides the tax outcome.

Permanent establishment risk and what creates it

Companies use contractors in foreign jurisdictions partly because contractors generally don’t create permanent establishment risk for the client the way a local employee might. But this only holds as long as the contractor is genuinely independent — working to deliver a result, not functioning as a de facto local presence of the client’s business.

Tax authorities looking at a contractor arrangement that has lasted several years, with a single primary client and daily attendance at the client’s premises, may ask whether the arrangement is substantively employment. One of the factors they examine is the nature of the work and the regularity of presence. A time record that shows daily work at a single client’s office for extended periods tells a different story than a record that shows project-based deliverables with variable hours.

This isn’t an argument to misrepresent your arrangement. It’s an argument to understand what your time record shows — and to make sure it reflects how the engagement actually works, not a distorted picture in either direction.

Digital nomad visas and the documentation they require

Several countries have introduced digital nomad or remote worker visas aimed at contractors with non-local income. Spain’s Startup Law created one in 2023. Portugal, Greece, Croatia, and Estonia have similar programs, each with their own requirements, but a common thread: you need to demonstrate that your professional activity is ongoing and substantive, not a freelance side project.

“Evidence of ongoing professional activity” is interpreted differently by different immigration offices, but in practice it often means: can you show consistent working time over recent months? Bank statements showing income help, but they’re evidence of payment, not evidence of work. A time record showing active project sessions — with timestamps, location, and project context — is a more direct answer to the question the visa officer is asking.

The records that travel with you

The practical problem for contractors working internationally is that the records they need often span multiple systems: bank accounts in two countries, contracts with clients in a third, work sessions logged in a tool they may have stopped using by the time someone asks.

The record with the most survival value is the one you export consistently and store independently: monthly time log exports with location data, in a format you can produce on demand, regardless of what happens to the tool that generated them. Combined with contracts, invoices, and bank statements, this is the documentation that lets a tax advisor, immigration attorney, or authority trace your activity across jurisdictions.

The investment is small. The alternative — reconstructing a year of international contracting from memory when an authority asks — is much more expensive in time and professional fees than building the record as you go.

HRaaS logs session start and end times with location data. For contractors working across jurisdictions, the exportable monthly record is the piece of documentation that’s hardest to replicate after the fact.