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Never Declared Income - Gotta Start Now

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GC12

New member
Dec 17, 2019
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#1
So this is kind of a funny story...

I’ve managed to never pay taxes. At first it was because I was receiving small amounts through my freelancing business and nobody noticed. I used bank accounts in my country (EU country) but it flew under the radar. I spread the payments over several banks and all was fine. Then I left the country and became a digital nomad. I also never had a job, I did the freelancing thing as soon as I finished high-school.

Technically - I never had ANY income whatsoever or that’s what the tax authorities think, unless they’ve audited my income. If they did, I surely don’t know anything about it. I’ve closed my accounts except one which had less than $1000 on it in its lifetime.

I traveled around the world, never paid tax anywhere. At some point, I started earning more and more money, earning more in a month than in six months the year before. However, by this point, I’d mostly just visit my clients and get paid in cash. So for the last year or so, there is virtually no digital trace of any income. I do have money deposited on pre-paid cards that I use for “stuff” but the vast majority was liquid.

Now...

I realize this will not fly for long. I don’t know my tax resident status but I guess it’s my old country, even if I haven’t lived there. Technically, income earned OUTSIDE of my home country while I’m OUTSIDE is not taxable, even as a freelancer. But I think personal income tax is. I don’t know. I haven’t been there for a long time.

So somehow I’ve managed to jump from place to place and figure it out, but now I want to stop this insanity. It’s just a matter of time until it will go really bad. I have an advantage because I have cash transactions that can’t be proved (all the services I provide are legal, it is digital marketing consultancy) and the people who are paying me are good friends.

But...

I need a real bank account.

I need to start paying taxes, somewhere.

I need to get a tax history.

I want to invest into assets and I want to get past KYC - not by faking documents (I don’t want to try it in the country I’m interested in staying) but by starting anew.

I need to get back on the grid, as I need to open a company and move past freelancing. And after doing this for... eight years, I don’t even know where to start. I have TransferWise, Revolut and other EMIs. But somehow, I need to start from zero, without raising red flags.

Any advice?
 
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#3
So:
1. move to a low tax country.
2. Gain residency.
3. Open a company.
4. Have paper trail.

fair enough. What do you think of Estonia? E-citizen and all?

I am not sure how can one gain residency without a job though. I have spent half a year in Malaysia on tourist visas.
 
#4
Malta is apparently a mafia state, it was discussed just a few days ago on this forum.

Move to Cyprus, you need to file forms MEU1 and TD126 to become tax resident there.
 
#8
GC12 said:
Technically - I never had ANY income whatsoever or that’s what the tax authorities think, unless they’ve audited my income. If they did, I surely don’t know anything about it. I’ve closed my accounts except one which had less than $1000 on it in its lifetime.
Click to expand...
Having money is not a crime. Yet... :cool: You didn't specify your country - it is good to note that your situation can catch up with you in certain countries.

For example Romania and some other EU countries have laws about source of wealth that are very strict - they can actually confiscate your assets / freeze accounts if you're not able to prove the source. So it is an effective 100 % tax, usually it is not enforced because I believe such law is unconstitutional... However be aware that the law exists - it may not be used often but that doesn't mean it can't be used against you.

GC12 said:
fair enough. What do you think of Estonia? E-citizen and all?

I am not sure how can one gain residency without a job though. I have spent half a year in Malaysia on tourist visas.
Click to expand...
What you mention is e-residency, mostly a way to communicate with government institutions in Estonia. It doesn't mean or change anything for you tax wise. It helps if you want to live in Estonia or have a company there.

joseph15 said:
not to derail the thread but Lol dubai is literally filled with the most beautiful girls in the world. Ever been on Instagram?? Lots of rich guys (and IG models) from all over the world there.
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Oh, do you mean the prostitutes from Ukraine? Or maybe you used your see-through glasses that allow you to see through the hijabs of the locals and niqabs of the Saudis? I don't think this is the most important point in this topic...

However you're kinda right. :D What is important to mention is that major UAE cities are 70-80% immigrants, mostly Indians, Pakistani, Filipino, other Arabs, Nepali, a bit of Europeans and Americans - most of the people do NOT wear the traditional clothing.
 
#9
It’s one of those very strict countries.

The thing is that I don’t have any money in the accounts of my home country. I have like $10 on an account I haven’t used for years. Nor assets.

Regarding Estonia, yes, I was thinking opening a company there. Seems attractive. However, after TRYING and failing dramatically with a company in Hong Kong (couldn’t even get a bank account), I’m weary about all options.

I have no idea what to next. I’ll fly to Europe soon and talk with a lawyer and Cyprus seems a good option. However, I wish there was a “for dummies” guide because I don’t know how to prove my income to Cyprus (as I said, I took mostly cash last year, I can always deposit it into an account but I don’t have a history of payments at any bank or so).

I may just go to Taiwan you know? 16% personal tax and be done with it.

I guess I’ve just hit the limitation of living off the grid. For years nobody knew where I was, or what I was doing. I worked with the same people who sent me money any way I wanted. But I want to start selling products and to buy assets.

I wonder if there are any solutions in the mentor area, the paid section of the forum. I don’t need anonymous accounts at this moment. I want the opposite. I want to build a front with everything done right... at least for a year or two :)
 
#10
Pick your country of choice, move there and start fresh. Nobody is going to ask where past wealth comes from. Even your original country, if you've been there less than half a year each year you're likely not tax resident there either.
 
#11
Okay... I guess it could actually be that simple and I’m overthinking this. I swear, I have this habit of taking a simple thing and making it ten times more complex.

So, I could just move let’s say to... Spain and open a company there right away? I can use EMIs until I get a proper account but... can it actually be THAT simple?
 
#12
GC12 said:
Okay... I guess it could actually be that simple and I’m overthinking this. I swear, I have this habit of taking a simple thing and making it ten times more complex.

So, I could just move let’s say to... Spain and open a company there right away? I can use EMIs until I get a proper account but... can it actually be THAT simple?
Click to expand...
I'm not sure about Spain specifics but in theory, yes. Company registration and personal bank account shouldn't be an issue but banks might want to see a business plan or references for a corporate account
 
#13
joseph15 said:
Why don't people ever mention Dubai when talking about 0% tax as a resident?
Click to expand...
Dubai is really not bad if it is possible for you to stay there. If I had the option I would do that without questioning if it is the right decision. I would go for Dubai over Cyprus, Malta and even Spain. You can save up all the money while you stay there for some years and then when you have sufficient of funds you can move to Span, Greece or France or wherever you find it great to live the rest of your live.
 
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#14
I cannot understand the advice about the opening company for that purpose. If your client pays you as a private person, continue to stay as a private. It is not violence, because you will pay taxes as a private person with tax residency. No deals with governments like opening companies, less headache a calm private life.
To get a tax residency with EU citizenship(are you?), not difficult in most countries.
I think Cyprus is for you.
 
#15
@ Opening a company. The reason I want to open a company is because I want to branch out, sell products online and that’s a bit harder to do as an individual. But yes, I do see your point, until I’m ready to do that, I can pay taxes as a private person. I guess it’s taxable as my income tax, right?

@ EU - Yes, EU passport.

@ Cyprus is a nice place. I’ve stayed there. I don’t know if I’d stay there for long but it’s certainly on my list. I’m still in Asia as of this moment.

This is great. I‘ll finally find a solution to this.
 
#16
I have a question...

From 1 to 10, how stupid it would be to go back to my home country, open a sole trader / company or simply file my Income taxes?

Won’t it trigger any red flags for the... decade I haven’t?
 
#17
GC12 said:
income earned OUTSIDE of my home country while I’m OUTSIDE is not taxable, even as a freelancer. But I think personal income tax is.
Click to expand...
This makes no sense, you need to answer that clearly first.
If the first sentence is true then it's golden and you have nothing to do, just register for a tax ID in your home country and that's all.
 
#18
Ah, sure, in this case, you need a company work with many clients. I thought about a few contracts.
GC12 said:
I don’t know if I’d stay there for long but it’s certainly on my list.
Click to expand...
As I know, just show 30000 EUR on deposit in any Cyprus bank. But to open bank account you need Tax certificate, they asked for sure.
I think so: "just register for a tax ID in your home country and that's all. "
 
#19
joseph15 said:
Why don't people ever mention Dubai when talking about 0% tax as a resident?
Click to expand...
Bcuz he have his money as cash once he enter dubai they can ask him to proof from where he got this money, but i think this happen if he bring more than 5k or 7k$in cash but not sure about the exact money but they do ask, second in case he bring small amount then he go inside make his license and get residents visa once he try to bring his money which what i understand is more than 20k$ or even more, then they will ask him from where you got this money and he need to prove that otherwise it will be freeze, its possible to take all that in and do all things legally in dubai but it will take time and long process and get clients here, get invoices and proof from his old clients
 
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