How to manage taxes as a freelancer working for international clients

Freelancing has opened up the world. It’s aided the rise of remote work and has unlocked endless opportunities. But along with the flexibility and freedom comes a not-so-glamorous part of the job — managing your taxes.

For freelancers working with international clients, tax season can get tricky. Which country’s tax laws apply? How do you report foreign income? Are you eligible for tax deductions? What if you're paid in multiple currencies? If these questions give you a headache, you’re not alone.

In this article, I’ll walk through the key things every international freelancer needs to know about handling taxes. I’ll also let you know the role that Grey can play in that process.

Also read: Earning in USD? Here’s how to receive your salary as a remote worker

1. Understand your tax residency

The first step in managing your taxes is knowing where you’re legally required to pay them. For most freelancers, regardless of where your clients are located, this will be your country of residence. Your tax residency is typically determined by the number of days you spend in a country or where your primary ties (like your home or family) are based.

Even if your income is earned abroad, you may still be obligated to report and pay taxes in your home country. So, make sure you know the rules your local tax authority follows and stay up to date with their thresholds and reporting requirements.

2. Track all your income, no matter where it comes from

Freelancers often juggle multiple income streams — projects from three countries, a retainer from another, and maybe a one-off gig here and there. It’s crucial to keep track of everything.

You should record:

• The amount you were paid
• The date of payment
• The client's name and country
• The currency used
• The exchange rate at the time (for tax conversions)

Grey can help you streamline this process by offering multi-currency accounts and transaction history in one place, which makes reporting much easier when it’s time to file your taxes.

3. Keep track of your expenses and deductions

One of the perks of freelancing is that many of your business-related expenses may be deductible. This includes:

• Software subscriptions
• Internet and phone bills
• Marketing or design tools
• Office supplies or coworking space fees
• Professional development or courses

You need to document your expenses meticulously. Keep receipts, use digital bookkeeping tools, and match each expense with the project it relates to. This will reduce your taxable income and keep you audit-ready.

4. Understand how to convert and report foreign income

Most tax authorities require you to report your income in your local currency. If you’re getting paid in foreign currencies like USD, GBP, or EUR, you’ll need to convert these amounts using the exchange rate on the transaction date or an average rate provided by your country’s tax authority.

Grey makes this simpler by showing you your income in multiple currencies and helping you convert when the rates are most favourable.

5. Be aware of double taxation rules

If you’re working with international clients, you might worry about paying tax twice — once in your home country and once in your client’s country. Thankfully, many countries have double taxation treaties that protect freelancers from this.

These treaties outline which country gets to tax what portion of your income and can save you from overpaying. Be sure to check if your country has such agreements in place with the countries you work with. A tax professional can help you take full advantage of these protections.

6. Set money aside for taxes consistently

Unlike salaried workers, freelancers don’t have taxes deducted from their payments. It’s your responsibility to set aside money for tax throughout the year. A good rule of thumb is to save around 20–30% of your income, depending on your country’s tax rate. This ensures you’re not caught off guard when it’s time to file.

7. Consider working with a tax professional

Freelancer taxes can get complex, especially when international clients and multiple currencies are involved. A certified tax advisor in your country can help you:

• File taxes accurately and on time
• Take advantage of all deductions
• Navigate local and international tax laws
• Understand how to manage VAT or other sales taxes (if applicable)

Think of it as an investment in your peace of mind.

Also read: High-paying remote jobs you can land without experience

Handling taxes as an international freelancer might seem overwhelming at first, but with the right approach and the right tools, it won’t be. By staying organised, setting aside funds early, and using platforms like Grey to manage your payments, you’ll be better prepared come tax season.

Having a system that keeps your finances clear and compliant is key to running a sustainable freelance career. Create your free Grey account today or download the app to enjoy inclusive global banking, designed for you to carry your dreams across borders.

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