Tax Residency Myth

[@holeefuk8505]

Another great reminder. Working on a "Clean break" myself. Luckily for me its simpler but not all tax nets are equal in difficulty to escape from

[@OffshoreCitizen]

Happy to hear that! How it's going?

[@holeefuk8505]

@@OffshoreCitizen A little nerovus about how smooth the execution will be but overall in good spirits.

[@AlbertCloete]

I really appreciate these informative videos!

[@gn2650]

Is it possible to spend several months a year in a country without triggering tax liability?

[@rabby185]

Question: In Residency-Based Tax country where residents are taxed on worldwide income, do residents also have to pay tax for the incomes abroad which they never bring to the country?

[@mvogt]

I just got a certificate of fiscal residence of Bulgaria for 2022. In what scenarios would I still end up paying taxes in Germany given that Bulgaria has a double taxation treaty with Germany?

[@OffshoreCitizen]

If you meet the tax residency rules for Germany and under the treaty tie breakers it didn't favor Bulgaria. Usually the biggest deal is where do you have a home? If you have a home in Bulgaria but not Germany that's a strong first step.

[@stevemyers2092]

great info - once again. Thank you. Question: starting up an online accounting biz in Canada where I live but do not own property, using philippine/india contractors, I have CDN + UK passports, free to relocate anywhere but little cash to do so (bootstrapping the startup). How can I save taxes, mostly concerned for the future when I am doing $1-2M + month? I cannot afford to pay $200K for my family to move to St Kits.

[@OffshoreCitizen]

Well you'd probably never go live in St Kitts. But if you can't afford to relocate yet then I wouldn't worry too much about tax. I'd focus on building the business first then relocate once it starts to get some traction. Starting a company is hard enough without laying on extra challenges like relocation and there's no tax if you're not profitable. When starting a company you want to minimize the possible causes of failure and stretch out your runway as much as possible. Beyond that as you grow you can have a foreign subsidiary of your Canadian company, see our video on international tax planning for Canadians

[@chocmilkisgood]

@@OffshoreCitizen no revenue, no tax 😅 so true. So many people worry about tax optimization on their first business but really they should be worried about making cash.

[@shawnhua6204]

I think you hit the nail right on the head. If one's home country still considers him a tax resident, he still can't escape taxes. I am a Canadian, been notified by CRA I am considered a non-resident. I had been travelling the world in the last few years, I am not a resident anywhere. when I try to open an account with Interactive Brokers or TD Ameritrade, they insist I have to have a tax residence.... so I still need to get residency in a territorial tax system country, to escape from those capital gains taxes?

[@OffshoreCitizen]

See our recent video on the territorial tax myth. It doesn't really work the way you're describing but you do need to be able to offer a residence.

[@unknowninfinium4353]

Hey Micheal, have you heard anything regarding a new retirement plan from Italy? I been reading comments/forums and apparently there is a talk about a retirement Visa with low tax but with the requirement of staying in the country for sometime much like Portugal. Also it is only applied to limited cities. Have you heard anything like this or any updates if this is taking place? Good to see you healthy Micheal.

[@OffshoreCitizen]

Yeah they have an option for pensioners 7% tax typically very similar to he Greek option

[@Omar-uz5vj]

So true, when I think about tax residency, I usually focus on the opposite of what you’ve explained in this video. thank you such a clear and concise explanation!

[@OffshoreCitizen]

Always happy to be of service! Anything you'd like to see next?

[@Omar-uz5vj]

@@OffshoreCitizen I would love to hear you talk more about different banking solutions when relocating abroad. Which solution do you think is better to adopt when you want to become a tax non-resident of your country? Should you just go with fintech banking solutions? Or should you be adopting a sort of hybrid solution?

[@rithondhar8171]

Hey Michael, nice video. Could you make a video about permanent residence through small properties. Not necessarily a 100000-500000 one. For someone, who wants to get a residence in Europe and live there on a budget. E.g.: Serbian residence with any property.

[@OffshoreCitizen]

Sure, great suggestion

[@unknowninfinium4353]

I second this.

[@FighterFred]

Exactly, checked the tax authority for tax treaties relocating from Sweden, found nothing. Zero information that there's no tax from Sweden in France for example. Otherwise it's 25%. So they tax you even if you leave the country, same in the US. The only way to avoid that is to get rid of your citizenship.

[@kamil-6561]

There is MLI signed by all OECD countries that rules has changed multiple tax agreements so basically you will have test where you are tax residency. There is 4 steps to determine your stance. Home in Frtance no home in Sweden +183 days live/work in France = France residency at "tested case".

[@mrlds3202]

Good points, all true!

[@OffshoreCitizen]

Thank you! Anything you'd like to see next?

[@mrlds3202]

@@OffshoreCitizen I'm not sure honestly, I moved to the Balkans about 10 months ago and finally I feel like I have things figured out pretty well and have replicated my Western lifestyle (car, nice apartment, home office) pretty well. Maybe a segment on gun rights in Eastern Europe lol, that's maybe one of the last curiosities I have atm, thanks for the great content!

[@Bri-wi8kq]

Great vid Michael, thank you. As an ex-soldier and history lover I believe a huge war between Russia & Ukraine/NATO is highly likely. War is normally terrible for economies & business so where should we look to invest and what steps would you take to secure our finances & residencies? Brian

[@OffshoreCitizen]

What's behind your analysis? Russia went into Hungary, Czech, Poland, Georgia, Crimea and the west didn't intervene.

[@OffshoreCitizen]

Great question on securing investments and residencies I'll do a video on that

[@Bri-wi8kq]

@@OffshoreCitizen They were different times. I see many concerning parallels between Russia today and Germany 1938. I see even more worrying concerning parallels between Adolf personally and politically then and Vladimir personally and politically today. But as a soldier no country can afford to mobilize such a huge army and air force without the big show for it's population to fuss over. Plus it follows the hundred year cycle of repetition, we're late - 105 yrs since WW1. So do we buy shares in munitions and medicals or buy land and gold, and do we relocate to NZ or latin America??

[@Bri-wi8kq]

@@OffshoreCitizen Wonderful, thank you Michael. The other crystal ball I'd love to view is how the conflict will impact on neighbouring countries, Romania, Georgia, Poland, Bulgaria, which passports to hold and which to ditch...? PS My dad co-wrote the history of Mad Harry(Victoria Cross) Australia's best soldier... B

[@biberhund]

Then how to get out in a clean way sir?

[@OffshoreCitizen]

Depends on the country these things are very specific you can't generalize. For example in some cases it's about ties, there might be exit procedures, time requirements, etc. Definitely reach out and book a call if you want to go over your specific situation.

[@scrillathekid5562]

I like your videos a lot, but in this video you’ve chosen a quagmire topic that is 100% individual. As you know everyone’s situation is different depending on a myriad of circumstances. Most people and many professionals don’t fully understand international or domestic tax compliance.

[@OffshoreCitizen]

Totally true, it's not smart to try to navigate these things by watching KZbin videos. What I try to give here are some basics of common misconceptions that will get people into trouble so they can avoid those as well as understand some of the possibilities that exist out there, then it's best to do a direct consultation if you're interested.

[@MyLatinLife]

🔥🔥🔥

[@OffshoreCitizen]

Any thoughts on the topic?😄

[@chrave1956]

Good information…but you try to use “legal terms’ for example, don’t use ‘home country’ use Country of citizenship instead.

[@OffshoreCitizen]

I'm not referring to country of citizenship necessarily. Rather I'm referring to your originating country, which could be different. For example, someone moves from indonesia (country of citizenship) to Australia and lives there for a number of years. They then want to go to say Dubai. They have to be very concerned about Australia and exiting the Australian system properly even though its not their country of citizenship.

[@chocmilkisgood]

I think it should be "negging country" I have 3 passports, 2 of them have very clear rules on when I have to pay tax there. 1 of them sees me as a yield producing asset and if they see me getting on a taxi in their country, I'm sure it'll qualify as tax residency because I'm using the roads.

[@anthonygalitsky8448]

But Andrew from Nomad Capitalist is saying something different...

[@chrave1956]

I don’t think so.

[@wesleymalutama3651]

Actually, they are both saying the same thing on the subject but on a different way.

[@OffshoreCitizen]

I'd be careful about some things he says keep in mind he's not a tax expert, some of the information is fine but he's been known to put out some inaccurate info, which is probably why he tends to be much more light on details these days.

[@unknowninfinium4353]

Not just that there is also a reviews of his service which tells a different story.

[@donovanmic]

Most of Andrew’s tax information is aimed at US citizens and their citizenship based taxation rather than the residency based system that applies in the rest of the world.

[@a0nmusic]

Agreed. Getting out of the tax net is pretty hard to do cleanly

[@OffshoreCitizen]

Have you ever tried doing it?

[@a0nmusic]

@@OffshoreCitizen have been planning all the steps for some time now, but have 1 more year before I can break ties with my current country.

[@BrendanMetcalfe]

🔥🔥🔥