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Pure speculation.
Try the UK, Netherlands, Portugal, Italy, Belgium. No ID invalidation upon registering as a non-resident. Those are just a few examples, in practice it's doable in all of the EU 27 with Spain being the most difficult. Spanish officials will communicate residency changes to local banks which will likely cause a mandatory CRS re-certification or account closure as you want to leave. In the case of Spanish proxy residency, pair it with a non-Spanish bank account from another EU state.
Should some of the nations invalidate non-resident's IDs in the future, the picture ID is still going to be good for banking and phone contracts, for as long as the document is valid. I can't imagine them physically destroying the document in such cases. Special ID verification software will deem the document genuine, because it is, and the software does not cross-check against a government database to read residency status.
Enjoy!
Pure speculation.
Try the UK, Netherlands, Portugal, Italy, Belgium. No ID invalidation upon registering as a non-resident. Those are just a few examples, in practice it's doable in all of the EU 27 with Spain being the most difficult. Spanish officials will communicate residency changes to local banks which will likely cause a mandatory CRS re-certification or account closure as you want to leave. In the case of Spanish proxy residency, pair it with a non-Spanish bank account from another EU state.
Should some of the nations invalidate non-resident's IDs in the future, the picture ID is still going to be good for banking and phone contracts, for as long as the document is valid. I can't imagine them physically destroying the document in such cases. Special ID verification software will deem the document genuine, because it is, and the software does not cross-check against a government database to read residency status.
Enjoy!
In some member states, there are other non-banking/non-residency related issues to consider. For example, in Hungary, purchasing property in your name as a foreigner requires a special approval which can cause delays of a few to several months.
In Portugal there are easier banks to open a bank account for foreigners, mostly the newer ones.
@xzars but is ID needed in the 1st place? Hassle with it.
Once you get a job, your ID isn't needed to open a bank account because work permit will allows you to open it. Then:
a) open a bank account
b) get fired at your job
c) register as non resident
d) leave the country
e) don't use an account for 1 year to avoid paying taxes. Or perhaps, spend $100 during the 1st year, to avoid getting it shut down because of inactivity
Will this work? Without ID
Also, your plan is for Europe. But Europe? Shouldn't it be avoided altogether when it comes to taxes and proxy tax residence especially?
Once you get a job, your ID isn't needed to open a bank account because work permit will allows you to open it. Then:
a) open a bank account
b) get fired at your job
c) register as non resident
d) leave the country
e) don't use an account for 1 year to avoid paying taxes. Or perhaps, spend $100 during the 1st year, to avoid getting it shut down because of inactivity
Will this work? Without ID
Also, your plan is for Europe. But Europe? Shouldn't it be avoided altogether when it comes to taxes and proxy tax residence especially?
@blackeric
You've put a little thought into this but there are a couple of points I'd like to highlight. When opening an account with a work permit, you must still show a passport or a picture ID - no way around it. You can use the ID of your true country of residence, but you shouldn't.
If you claim to be a resident of a country in which you are not a resident, it's best to fortify your claim (lie) with a foreign ID document. Meanwhile, you want to present as little (ideally, zero) connection to your true country of residence. ID documents, address proofs, phone numbers etc. - every sliver of documentation and data on bank's record must be from somewhere else. Keep the odds of getting caught as low as possible.
As to your question, why bother with a fake residency from a tax hell like the EU? Plausible deniability.
If you claim to be a tax resident in a low or zero tax place like Bermuda or Cayman Islands, you're on your knees, begging for attention and double checks. As someone claiming to be an Italian tax payer, you will, first of all, have better banking options, but secondly, nobody will associate you with illegal tax evasion. Quite the opposite.
-----
Under CRS rules, banks are allowed to ask probing questions to determine customer's true country of residence, and add a second, even a third CRS AEOI report destination, without informing the customer. In particular, OECD actively encourages banks to pay close attention when the customer claims to be a resident in a "high-risk state". More information about current definitions here: Residence/Citizenship by investment - Organisation for Economic Co-operation and Development. Not at all impossible that those definitions will catch more states in the future. For example, if they decide that any state where the personal income tax rate is less than 10% is "high-risk".
You've put a little thought into this but there are a couple of points I'd like to highlight. When opening an account with a work permit, you must still show a passport or a picture ID - no way around it. You can use the ID of your true country of residence, but you shouldn't.
If you claim to be a resident of a country in which you are not a resident, it's best to fortify your claim (lie) with a foreign ID document. Meanwhile, you want to present as little (ideally, zero) connection to your true country of residence. ID documents, address proofs, phone numbers etc. - every sliver of documentation and data on bank's record must be from somewhere else. Keep the odds of getting caught as low as possible.
As to your question, why bother with a fake residency from a tax hell like the EU? Plausible deniability.
If you claim to be a tax resident in a low or zero tax place like Bermuda or Cayman Islands, you're on your knees, begging for attention and double checks. As someone claiming to be an Italian tax payer, you will, first of all, have better banking options, but secondly, nobody will associate you with illegal tax evasion. Quite the opposite.
-----
Under CRS rules, banks are allowed to ask probing questions to determine customer's true country of residence, and add a second, even a third CRS AEOI report destination, without informing the customer. In particular, OECD actively encourages banks to pay close attention when the customer claims to be a resident in a "high-risk state". More information about current definitions here: Residence/Citizenship by investment - Organisation for Economic Co-operation and Development. Not at all impossible that those definitions will catch more states in the future. For example, if they decide that any state where the personal income tax rate is less than 10% is "high-risk".
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@xzars
Regarding ID -- understood.
Regarding proxy tax residency in Europe -- still why Europe?
Are those who don't live in Europe and UK, US -- are automatically associated with tax illegal tax evasion? Yes, Bermuda or Cayman Islands and the like will look suspicious. But there're other more reputable countries that have some non-zero taxes. But yet smaller than those of the countries in Europe, and they aren't aggressive when it comes taxes. With territorial-based taxition.
Regarding ID -- understood.
Regarding proxy tax residency in Europe -- still why Europe?
Are those who don't live in Europe and UK, US -- are automatically associated with tax illegal tax evasion? Yes, Bermuda or Cayman Islands and the like will look suspicious. But there're other more reputable countries that have some non-zero taxes. But yet smaller than those of the countries in Europe, and they aren't aggressive when it comes taxes. With territorial-based taxition.
Yup, places like Uruguay and Chile are perfectly fine for the purpose. Territorial taxation principle is an option but not a necessity. The main reason I highlighted EU as an option is to showcase that it's not at all necessary to use CBI/RBI programs from banana republics and other tax havens. OECD panelists like to discuss low tax and secretive jurisdictions while ignoring the fact that a phony residency combined with a real estate investment that spits out a fresh proof of address every month is a universal risk that applies to all countries, developed or undeveloped, high tax or low tax, EU or non-EU.
To be frank, it's easier to abolish income and wealth taxes altogether and raise revenue from other (enforceable) sources than trying to shovel sand with a slice of Swiss cheese.
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Don't give those guys ideas!
Since we already ruined it, mine is more commie and far better!
Envisioning A Global OECD Tax Residency Database:
- Banks and FIs don't ask for individual's proof of address, tax residency certificates, nor give any FATCA/CRS forms to fill in. They just annually poll the database to determine individual's tax residency.
- When an individual applies for residency in a new country, authorities work with the database and pull tax residency of that individual from another country to themselves, claiming taxation rights, stamping the individual as their milking cow.
- When an individual wants to renounce residency, or just travel around like a hipster nomad, not paying tax anywhere, he cannot do so. He must first apply for residency in another country which in turn will pull his residency alongside taxation rights to themselves. Until then, the individual will pay tax in the current state of tax residency, even if he spends 0 days there.
- A few checks are required to address a vulnerability where an individual stamped as tax resident of a low/no-tax country lives in another country without properly registering with the authorities. For example, it's possible to monitor visa over-stays and airport travel data, and automatically convert overstays to tax residency, based on the 183-day rules or similar criteria.
- Before any entries exist in that database, all tax residencies default to individual's country of birth.
@OECD comrades - How long to implement?
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@xzars
Hey mate, I checked this link Country-by-Country exchange relationships and it shows different information than this link - it is showing some active relationships between countries that the first link in your OP does not show. It's the same website so i am a little confused.
Maybe it's a stupid question but I don't understand the difference.
Hey mate, I checked this link Country-by-Country exchange relationships and it shows different information than this link - it is showing some active relationships between countries that the first link in your OP does not show. It's the same website so i am a little confused.
Maybe it's a stupid question but I don't understand the difference.
How about this:
a bank usually asks for 2 addresses - current one (which may be of an hotel/airbnb), and permanent/residential one (expected to be abroad).
If a bank doesn't verify those addresses in any way, it just asks for them, what's the safest way to go? Without having to lie per ser. Is it better to give it 2 addresses in this current country? As opposed to giving it one address in this country and the other one in some other country where I may or may not have a property. Namely, 2 addresses in this current country is less of info than 1 address in the current and the other in some other country.
Another question: are CRS reports always sent to the country of my passport too? No matter what? Even if I haven't used any address of that country to open an account?
Give a From-To example with an inconsistency, I'll check.
blackeric said:
Never encountered that. Where is that the norm? In more strict places like the UK and France, banks sometimes ask for address/residency history - i.e. your previous addresses for the last 2 years.
1) If they ask for 2 addresses, give them one. Or fill in a tickbox which says "the same as above" or similar. They can't force you to have a permanent address and a temporary address somewhere else.
2) If you live in a hotel, and they don't accept it as your permanent address, it's perfectly normal. Get a rental contract, a title deed, or another proof of address which communicates a degree of permanency. It's your duty to sort it out before you try to open an account in a foreign country as a "resident" of that country.
blackeric said:
Nope, citizenship is explicitly out of scope. Only residency and "residency indica" are relevant. The less obvious residency indica are things like the country code of your phone number, but also destination country(es) of your standing order payments. You would expect that 98% of the time, the banks will not report to citizenship country with the remaining 2% made up of human/computer errors, and bank's suspicion that the CRS self-certification is dishonest. Those are reasons enough to not expose any kind of connection to your true country of residence if you're hiding big sums.
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For example the first one says there is no relationship from Aruba to Australia, but the second link says yes. Same thing for Belize to Australia, or Greenland to United Kingdom
@joseph15
The former link is for BEPS CbC reporting - another anti tax avoidance initiative of OECD. It is something that may be more of a concern for multi-national whales that bleed on-shore taxable profits to low tax jurisdictions with licensing fees, branding fees, artificial sub-contracting, and other fiscal engineering methods.
For bilateral and multilateral CRS information exchange relationships, refer to second link (the latter)
I'll get in contact with admin to get the link fixed. Thanks for pointing out.
The former link is for BEPS CbC reporting - another anti tax avoidance initiative of OECD. It is something that may be more of a concern for multi-national whales that bleed on-shore taxable profits to low tax jurisdictions with licensing fees, branding fees, artificial sub-contracting, and other fiscal engineering methods.
For bilateral and multilateral CRS information exchange relationships, refer to second link (the latter)
I'll get in contact with admin to get the link fixed. Thanks for pointing out.
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Lol, Mark! No, CRS is an illusion. It does not exist
Tens of millions of CRS reports are exchanged annually, we've heard of first cases of malicious CRS data breaches, but you're still in doubt if even one information exchange took place!
What the officials do with the data is another story. If your foreign account balance is boring, you will likely not hear anything from the officials. In most cases, the officials either ignore reports or send polite reminders/informative letters, asking to ensure foreign income and/or account balances are on the tax return.
This is an interesting piece of reading that covers some of this stuff: INSIGHT: Tax Transparency—Risks and Rewards
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