Busting The Biggest Myth About Double Tax Treaties: A Tax Expert's Perspective

[@yumchar7]

"Do your due diligence ahead of your move" is the key point for me. And use professional advisors, like Michael, to do so to get these questions answered: 1. How to stop being a tax resident in the country you're currently living in, it's not always straight forward 2. If you're setting yourself up to get paid as a company in an intermediate country (where there are zero taxes for companies if you don't operate / do business there), how do you register a company there and set up a business bank account there, 3. How do you pay the least tax in the country you're moving to - some visa types / citizenship types are better than others.

[@jamestewari-hh7et]

Thanks

[@patienceisalpha]

Read a US tax treaty savings clause and you'll see how they can be a fugazzi lol. Read the UAE French tax treaty and you'll be surprised. The French tax authority has an article in there that essentially says that a UAE resident, if he could have been deemed French tax resident by following the French tax residency test can be deemed French tax resident regardless of the treaty. Meaning that if you reside 365 days a year in the UAE but have most of your financial ties in France then you can be deemed French tax resident. Whats even more mind blowing is the fact that this treaty has been ratified and has a portal to another Corpus of legislation (the French tax code)

[@michelinevendette2284]

same thing in canada

[@joe0248]

UAE-Canada tax treaty is also interesting... According to Article 4, you have to be UAE CITIZEN for it to applies, being UAE RESIDENT is not enough. Thus, it boils down to whether Canada decides you are or aren't Canadian tax resident.

[@OlegScherbina]

same for Canada, in order to be non-resident for tax purposes for a Canadian resident you need to cut all the ties to Canada except a passport.

[@flurinjenal374]

Good video, thanks!

[@fjorddenierbear4832]

According to Norway I have tax residence in Norway for 3 years after I leave, even if I fulfill all the criteria for tax residence somewhere else. The Bulgaria-Norway agreement states: "1. The business profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein." I operate as a freelancer here, carrying out work online using my Bulgarian VAT number. I have no kind of permanent establishment back in Norway. Thus, it seems obvious that my Bulgaria-generated business income will only be taxable in Bulgaria. If Norway ends up taxing me, I guess I'll avoid work for a couple of years.

[@TheFredrikBakkee]

I’m in a similar situation in Georgia. How any updates on your situation? I’m also Norwegian

[@boisehingis2399]

as a canadian living overseas, tax treaty are overrated, dont limit yourself to those countries having treaty with your homeland, it will takes planning regardless,

[@mattkriese7170]

Another Canadian here (BC)! Dipping my toes into possibly working online from a South American country whilst earning income from Canada. Any tips for someone just getting started?

[@davidabushnell]

Absolutely spot on. I note that you want to be kind by not mentioning the onus of the typical Aricle 25’s stipulation of the Credit method of avoiding double taxation: the need to obtain an annual Certificate of Residency with its stated amount of Primary Country’s tax paid for submission to the Secondary Country, the need to therefore file the Primary Country’s taxes first, followed by that of the Secondary Country… sigh…

[@goldensilver793]

Came across you by accident...good stuff...Thanks for the vid...

[@OffshoreCitizen]

Welcome! Thanks for watching 🙏🏻

[@kevinstrong7520]

Here is a better example if I understand it correctly. Greece has a flat 7% tax program for pensions. In addition to your pension, you make a total of 100K from USA (pension and earned income). Greece will tax 7% of that $100,000 and the remaining can be excluded from USA taxes because of the foreign earned income exclusion (up to $126,500). Therefore, you effectively keep $93,000 out of the $100,000 because of the 7% flat tax, tax treaty and MOST importantly you being a tax resident of Greece.

[@p.c.h.6721]

Evil Hacienda, stay away from Spain (Shakira learned the hard way).

[@jakehart60]

My plan has been to just keep renting my $500 apartment in the USA while traveling Europe and Asia living off my passive income from my stocks. I would spend 2-4 weeks in each country nonstop therefore not staying long enough to be considered more than a tourist. I’ll only be paying taxes in the USA while living overseas full time only coming back to the states for a couple of weeks every year

[@kenlewis2253]

Look into the Foreign Earned Income Exclusion if you plan to be outside for 330+ days.

[@JonasThente-ji5xx]

Thank you sir for the knowledge you share!

[@OffshoreCitizen]

My pleasure!

[@alecventurelli6451]

As a Canadian individual without a company and ordering goods from the UK is it required to pay there VAT??

[@stevemitchell7839]

Is the 183 day rule fixed as to determining residency? If you own property in some parts of Canada, unless you live in it at least 183 days, you are liable for an empty homes tax of about 2% of value. So say if you live in the home for 183 days to avoid the empty homes tax and rent it out the rest of the year does that nevertheless make you a tax resident of Canada, even tho your center of life is still mostly in the US?

[@kenlewis2253]

Surely Canada would go after you for taxes if they are aware of your presence for so long.

[@munirhussain6849]

What if one of the countries where you paid tax on property income has capital control and you are not permitted to transfer funds to your resident country??

[@300rivers4]

Very informative. I had that question as it relates to a few decisions we're trying to make. Basically, you're taxed where your "stuff" is. Can one make a 3 or 4 month residence their "main" residence and still reside the balance in a different country. I think you explained it, but I just wanted to clarify. It sounds like it's not where you are, it's where your "base" is. Thanks, Michael. Always good to see a post of yours.

[@kenlewis2253]

The looser your arrangement, such as what your proposed, the easier it is for tax authorities to challenged you. They only way to safely do what you want, I believe, is to split your time across multiple countries when you are outside of the country with your main residence.

[@dariussssssssssssful]

What if my residence country (call it country A) has 0% tax, but country where the capital income comes from (call it country B) has, say, 15% tax. Will I have to pay only to country A (0%), or to whichever is higher (country B, 15%)? What it the general rule?

[@EmilyVogel-n2g]

What if your place of residence, the place that you own, that you spend the most time consistently, is a USA flagged boat that spends all of its time, Ex-VAT, in the Mediterranean? Is there any issue with a mobile boat being your "residence" if you don't own a home elsewhere?

[@PinkyLadybird]

I am currently living in Australia (citizen) and have worked and paid tax here for more than a decade. We are about to move to the Netherlands for 12 months where I will work in my online business. I am a German citizen and have no visa issue in the Netherlands. My family will be registered and my daughter will attend school there. During this time we will also receive income from renting out our apartment. For this next year I am very confused where I will be liable to pay tax. Will I just continue working on my (new) online business without worrying about the Netherlands, seeing that we will be back in Australia?

[@zackeryzackery9381]

I think you should distinguish between personal income tax/ capital gains vs. corporate income and capital gains. If I have management control of a company in Dubai and the company makes $10mill in profit, but I pay myself a salary or dividend of $100,000, I only owe personal income tax on the $100K regardless of where I reside.

[@MacSaxe]

Depends where you live, most places have Controlled Foreign Company rules where if you live in say the UK and you manage that foreign company from the uk then it is considered to be a UK company and falls under UK taxation. Therefore you pay uk tax etc on your salary and if its dividends they’re after tax so by the time you get your dividend the company will have already paid taxes in the uk. There are exceptions but not many. Only way to avoid Uk tax is to live somewhere else such as Dubai if that’s where your company is. In that case no income tax but there is corporation tax at 9%

[@Gorilladome4664]

Hey, thanx for the video...great content as usual! Quick question...contemplating this move near term... question involving becoming a tax resident of Thailand vai physically retiring and moving to Thailand. If I moved my Canadian stock portfolio overseas, say Singapore, to an investment bank, say DBS Vickers, access to NA markets, where a wealth manager took over the management of that account from myself. If the mind of the business remained in Singapore (through an individual trading account only), while Im residing in Thailand full time...then according to Thailand tax laws, those capitals gains would remain tax free if not remitted into Thailand...is that correct? So two points, the mind of the business must be in Singapore and the capital gains must remain offshore? RE double taxation treaties with Canada, Thailand....REV CAN would withhold is it %15 from my pension, is that right? and now with the new tax laws changing in Thailand for 2024, I would now have to pay a progressive tax on my Canadian pension coming into Thailand, but %15 REV CAN tax would be a tax credit? Thanx very much, 2 questions there I guess...

[@artistpartyman8263]

So, here is a scenario "If a person(s) Lives only in the USA and does an e-commerce business online by being an independent Artist & Music Producer, and streams music as a business, does that person have to pay 30% Treaty Tax to the global countries where the music is being streamed and collecting residual income?" I am asking this question regarding this Information Below: "Please note Person(s) may be subject to up to 30% withholding on payments for royalties if: an individual does not provide a U.S and Foreign Identification Number a person(s) is not a resident of a country with a tax treaty special rates or conditions are not claimed (if applicable)" Although this sounds like the opposite of what you just explained, What does this all mean for an independent music producer or e-commerce business practitioner?

[@munirhussain6849]

Do you pay double tax because one country has capital control in place and only permits a small amount to be taken out of the country per annum.

[@BarentSpringsted]

I am an 82 year old American resident in Thailand. I have a "Permanent Resident Permit" issued to me 16 years ago by the respective Thai government office. I have NO income in Thailand, employment or otherwise. My income is only funds (earnings) from a family trust fund maintained in a bank in the USA. I periodically request that the US bank remit a specific amount of funds from that account to my account in Bangkok with a Thai bank. I do file a USA income tax return every year but all of my returns for the past 3 years have noted NO US tax due do to the low level of my annual earnings. This will not change in the future. Will I be subject to any tax taxation going forward?? Thank you, B3

[@RichardGillespie-sm7ri]

Great content as always Michael. Is there a provision of order on DTA's when you have multiple tax residencies? For example, I'm Australian and move to New Zealand for 12 months and establish a permanent home their but still pop in and out of OZ (No home their anymore) and then decide to move to UAE leaving a home in NZ. Australia been Australia still claims you as a tax resident as they do. There is no DTA between the UAE and Australia, but you are still classed as a tax resident of NZ too, UAE says you're a tax resident of them and Australia does too. The head office/business is in the UAE. The DTA between NZ and Australia tiebreaker says you are NZ resident, but the UAE/NZ tie breaker agreement says you are UAE resident. Is that seen as "treaty shopping" to use the NZ/UAE DTA to negate Australia's taxing rights. Western countries have "sticky" residency rules which complicates matters. Thanks!

[@Energy950]

What happens to permanent travellers with no tax residency anywhere? Also, how do countries typically handle income to offshore LLCs rather than individuals?

[@OffshoreCitizen]

Depends on all the circumstances involved. Probably best to reach out so we can discuss all the details

[@lawtutoring]

Just ask AI like Microsoft copilot

[@raymondfrancis2983]

😂 Still yet more of you need to learn…..that one thing !! A company that retains all business income is entirely separate from yourself (I.e my company only pays income on its earnings but I only pay tax on my income) in my case I also have a trust in jurisdiction #1 that owns the assets and the income, a holding company in jurisdiction #2, subsidiaries in jurisdictions #3-#8 and I reside in jurisdictions #9-#15 But I also happen to be a multi-national with UK 🇬🇧, Irish 🇮🇪 and Swiss🇨🇭passports (thanks grandparents 😊) and that helps

[@pures1n]

What happens if you have multiple citizenships and some dont have double tax treaty with the country you reside, but some do?

[@JohnS-zq8ks]

I understand I'll end up paying the highest tax among two countries. My issue has to do with the "character" of income. For example, if I realize a six hundred thousand dollar "long term capital gain" on the sale of real estate in the US, then that rate is 20%. What if the other country has no capital gains taxes, then "recharacterizes" that income as ordinary earned income and hammers me for 40% (or whatever)? What if I do a tax deferred 1031 exchange of real estate in the US (with unrealized gains over $600,000), then will the foreign jurisdiction ignore US rules and hammer me for that? What about gifts to children's trusts, which benefit in the US by exemptions? What about inheritance taxes? Earned income is simple. All the other taxes are not, at least to me, when a foreign tax scheme is imposed onto US financial transactions.

[@Iamsamuel69_2.0]

I found this channel by accident it’s really good, but I’m an American. I wanna move to Thailand and get a retirement visa but I will have some dividends and some investments in America and I own a house in America so will I owe Thailand any type of taxes?

[@ywueeee]

can you create a video on crypto company setup for traders looking to create account on exchanges? UAE was good but now have the new tax

[@OffshoreCitizen]

Yeah it's getting more limited I'll see if I can create some updated crypto content

[@ywueeee]

@@OffshoreCitizen exactly markets are pumping need to setup the pipeline for exiting in the next 2 yrs

[@justingriffin2546]

Thanks Michael,

[@OffshoreCitizen]

A pleasure! What are your thoughts on this?

[@justingriffin2546]

@@OffshoreCitizen I'm looking to open factories in Bahrain and Antigua, (waiting on a patent) my primary residence is in Genting highlands just outside KL...I'll definitely be consulting you...I'm sure you can help me with 'my cunning plan'....

[@Bohemiahotrodandcustom]

Hi Michael, thank you for the clarification. If an Australian moves there company to Dubai and they live in Dubai as a tax resident and there are no assets in Australia do I still pay income tax to Australia?

[@OffshoreCitizen]

No, if you move your personal residency outside of Australia you will not pay taxes in Australia anymore. Same applies for the company, if you move your operations overseas and cut ties with Australia, while establishing a real business elsewhere your company will no longer be taxable in Australia. Of course, there are many details and nuances to consider here.

[@Bohemiahotrodandcustom]

@@OffshoreCitizen thank you Michael, I was getting a little stressed, I asked my accountant about 6 months ago that question and about setting up an offshore bank account and he said" I don't know". I'm in my research stage and I need to liquidate some assets then goodbye Australia, hello financial security.

[@ozziwar]

Another great video Michael! However, in a (very) few DTA's there are no tie-breaker rules. In that case, could you technically (in some cases) be a tax resident in two places?

[@rogerdiogo6893]

I'm more interested in the jesuits, the vatican tax enforcers😂😂😂

[@donovanmic]

The tie breaker rule can help if you move to a treaty country and want to keep some ties to your home country. For example, if you moved from Canada, but kept your golf club membership in Canada that normally could drag you back into the Canadian tax system, I.e. the Canadian tax authorities would argue that you’re still a Canadian tax resident. However, if you move to Barbados (a treaty country), you’d probably be OK if you had a house in Barbados and no house or apartment in Canada.

Too bad you don't just pay for what you're using and that's it

[@leevivian1576]

Helo

[@i1pro]

First!

[@OffshoreCitizen]

Nice! How did you like the video?

[@666jjdemon]

you talked too fast

[@anoncapitalist7045]

I listen on 2x speed, and it's fine 🤔

[@robster7012]

You can slow the speed down.

[@mvp019]

Then slow down the replay speed in the Settings.

[@arnoldvosloo220]

You can slow down the video

[@sacragon]

You listened too slow