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What countries make the most sense Tax Wise for my situaton?
- Thread starter banafinfodafuggiano
- Start date
Nobody forced you to move, it was your choice to move.
You aren't free when you don't have choices.
And can't the same argument be used when someone chooses to set up residency in UAE and then move around a few other countries in order to optimize their taxes?
Hi Cabin14! thanks for sharing your experience! very much appreciated!
I am also considering the TRP/GRP.
Question: Even if not taxed under the remittance basis, Do you need to REPORT your foreign-sourced income? (eg. Stockmarket gains, dividends, salary offshore, etc)
Also, is the Tax Residence Certificate they issue effective for the purpose of treaties?
I would probably need to make use of the TRC in case my country of origin disputes tax residency, so I want to know if in that case I would be able to access the tie-breaker rules under the DTT.
Many thanks in advance!
The most of EU countries has changed a law in a last few years. And CVI is in each country where you own or have rented residential property for 183+ days per year even if you do not spend 183+ days within a country. They call it rule of a toothbush. If you store your toothbrush somewhere permanently and you do not bring it with you, it can be considered a CVI.
So the best way is to travel within civilized world and nowhere own residential property, nowhere have rented residential property long term.
Having rented something on AirBnB for 2-3 months per year and move to another place afterwords is OK.
With the GRP you do not declare any of your global income to the Malta tax authorities - only the amounts that are remitted to the country, so basically for us it's the amount for the prepaid minimum tax, the rent, and fees for our agent. We don't bring any other cash into Malta and therefore only pay the minimum tax requirements.
As for the TRC - our agent says they can get one if we need it and it's a legal tax ID from a sovereign country. But as we notified the Australian Tax Office that we were leaving the country and no longer submitting tax returns, we haven't needed it. The key is whether you'll pass the "closer connections" test (or whatever residency tests you have in your home country). We have no property in Australia and we rent a property in Malta - plus we have Malta residence cards, tax IDs etc, so we feel pretty confident with our position.
The added bonus is that with the Malta residency card - we can skirt around the Schengen rules because we don't get stamps in our passports anymore.
It's a good option if you want the flexibility of a pretty good tax residency without a huge capital outlay and no requirement to be in the country.
Got more info on this? Which countries have changed, and how exactly?
Of the countries I follow more closely, i.e. the Nordics, UK/Ireland and Italy, Im only aware of Italy making recent changes to tax residency rules (besides Norway making the exit tax stricter).
Since 2024, Italy has:
#introduced a physical presence test - if you stay at least 183 days in Italy you are a tax resident in Italy.
#made the domicile test focus on familial ties only, and no longer economic interests.
#made it so you are no longer automatically tax resident in Italy if you are registered in Italy, it can now be debated.
So this actually makes it easier to own property in Italy for investment purposes without becoming a tax resident in Italy.
https://taxsummaries.pwc.com/greece/individual/residence it can be read up here. Greece is not clear and likely wont qualify easily.
countries which profit massively from holiday homes do do this (like italy spain greece).
Hi Uplana, I am EU citizen and even if I left the country some years ago, I still have economic ties there. I was also considering the Georgia HNWI program (as far as I know, no need to report global income), but not sure if the Tax Certificate is good enough against my country of origin. Also, I got a bit scared reading other threads about local banks freezing accounts, and the geopolitical climate overall. What is your view on the country and that program?
Thank you very much Cabin14! Very much appreciated! I am EU citizen so I m only looking for tax residency. But your answer has been spot on with the doubt about reporting. I think I have asked this question to chatGPT around 10 times in different ways, and half of the time the output is that as Malta non dom, you don't even need to report, but the other half of the times says that you DO need to report even if not taxed due under the remittance system.
Would you have any tip how to find good professional tax consultants in Malta? Thank you
Hi Sknomad, thanks for your message. Yes I am aware of the current requirements, I fullfill them.
My doubts are (i) whether they can issue an international TRC for the purpose of treaty, (ii) whether the taxpayer needs to report global income, and (iii) whether they can revoke the TRC even if a dispute arises (apparently Cyprus 60d non dom they can revoke it in the case of dispute).
The objective is to be able to use the TRC to access the tie-breaker rules and win an eventual dispute with those
Cyprus can't "revoke" it, their own laws say the paper is immediately invalid if any other country claims you as tax resident and you haven't spent 183+ days in Cyprus. So there is no need to revoke anything, the certificate is just void under Cypriot law because you will no longer be tax resident in Cyprus if some other country claims you as tax resident and you haven't spent 183+ days there.
Malta has no such rule, so as long as Malta considers you tax resident, you will have access to the treaty. But I wouldn't try it without proper presence in Malta.
"Hey, I rented a cheap room in Malta for the whole year, but I don't spend time there. Screw you, Australian tax office!" - not sure how well that will be received, especially if you hardly pay tax in Malta.
Malta has no such rule, so as long as Malta considers you tax resident, you will have access to the treaty. But I wouldn't try it without proper presence in Malta.
"Hey, I rented a cheap room in Malta for the whole year, but I don't spend time there. Screw you, Australian tax office!" - not sure how well that will be received, especially if you hardly pay tax in Malta.
Source?
Most high-tax countries have had such rules since forever and they are NOT about CVI.
You still don't understand the difference. Germany for example does not have a CVI under domestic law, but having a key to an apartment would make you tax resident.
By contrast, Estonia and Lithuania (not sure about Latvia) don't consider you tax resident if you own an apartment there - but if it's your CVI, you would be tax resident. Big difference.
What if I rent a place the whole year, but I take my toothbrush with me when I travel?
Germany has a "habitual abode" test, for which the toothbrush would be relevant. But you're just throwing it all together and talking about "EU", when every member country has their own tax residency rules. And tax law varies a lot within the EU.
It has always been like this. Since forever basically. And some countries can consider you tax resident even if you spend less than 3 months there, Switzerland, for example.
Most countries can also consider you tax resident if you have a spouse (even if separated) or child under the age of 18 in the country.
You have to check your individual situation and the rules of each country. Don't just assume "oh, it's all EU, they're all the same". Absolutely not.
By the way, Sweden will most likely implement a new law next year with a strict 120-day rule since I guess even the Swedish tax office realized their current rules leave too much room for interpretation.
No, it's not a magical paper. You can have many tax residency certificates.
If there's a treaty, the countries will have to come to an agreement on where you should pay tax. Legal representation in both countries will probably cost you quite a bit of money.
And even then, why would a country where you don't pay taxes and don't spend time try to defend you against a powerful high-tax country? They have little to gain from that.
It's a lot more advisable to establish proper ties somewhere and cut your ties with your home country.
Thanks for your reply. In my case, Georgia and my country of origin they do have a treaty. Cutting all ties is sometimes difficult, but even if you can do it, when you already live abroad, in a country without DTA, and you want to cut those ties, on the very same year, you need to report the disposal to the origin country, among other things, informing where you are resident, so the question comes back again from where you can do that.
If there is a treaty in place, the fact of having a TRC (even if local one, issued by Georgia), would this not be enough to access the tie-breaker rules?
With tie breaker rules, IF you can have access to them, is quite easy to beat the high-tax country owning only a home in the low-tax country. Again, the question is whether the low-tax country can step back (as Cyprus) if a dispute arises, or if the TRC is not enough to get access to tie breaker rule.
Thanks in advance for your comments
Cyprus indeed under the 60d residency makes you to declare "I will not be tax resident in another country", this was actually a red flag because seems indeed that they can make the TRC void.
Checking Malta, apparently even under the GRP/TRP, if you want a TRC for the purpose of DTA, they want you to spend 183 days in the island. To be honest, I don't get then what is the purpose of the existance of the TRP...
Anyway, narrowing down:
1. My country of origin, can consider me tax resident due to economic ties, even if I spend as little as 20days there, and not even having a home there.
2. However it seems there is no (low tax or zero tax) country where I can buy a home, and without spending 183 days (eg 30-60days) I can become protected by the DTA.
Am I missing something?
I'm not a lawyer - you should check with a lawyer from your home country. But in theory, yes.
Cyprus doesn't "step back", it's simply in their own law:
You are tax resident IF "you spend 183+ days in the country" OR "you spend 60+ days in the country AND no other country claims you as tax resident".
So if you spend only e.g. 90 days in the country and another country claims you as tax resident, then you no longer fulfill their requirements for tax residency.
Most newer tax treaties have also replaced the tie breakers with a clause like: "The tax authorities should decide on this in mutual agreement."
I don't know what your country of origin is, sounds a bit like Sweden? Maybe Estonia could work for you? It would probably look a lot better than Malta...
Alternatively, maybe you could cut your economic ties? Sell your shares to a family member or a foundation? Just some ideas...
Why don't you want to spend 183+ days in a place?
Hi JAN, thanks for your comments. Even lawyers give contradictory outputs. Country of origin is not Sweden.
Estonia... 20% rates on worldwide income, even CGT, unfortunately it doesn't work for me. But indeed is a country that makes you resident due to permanent residence in there.
I'm looking to cut ties as soon as I get a new tax residency. In the meanwhile, I live in a country without DTA with my country of origin, and family is there, that's why I don't want to live far from my family during 6months.
I am also having a look into Qatar. [UAE unfortunately don't work as there is no DTA] ¿someone has any experience in Qatar? According to PwC it seems you can get the tax residency without actually living there. But it seems to be that is a bit "at discretion/adHoc" of the government
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