Fears Grow Over Income Tax Loss as Europe Chases Remote Workers

The contest among countries to lure remote workers liberated from their offices by the pandemic is raising red flags about harmful tax competition.

Tourists hotspots like Spain, Croatia, Greece, Italy, and Portugal are seeking to attract mobile EU citizens with various perks like year-long tax holidays for new immigrants who work digitally, income tax relief on pensions, and flat tax rates—lower than locals pay—for new arrivals who are self-employed.

There’s concern that competition for remote workers through lower taxes would lead to lower revenue for governments, harming their economies. And countries that have a large population of high-earners could face ...