Many European countries have a rule of 183 days per year for deciding a tax domicile of a person. Does anyone have some experience with exploiting this by never spending so many days in one country in given year? It could be little bit naive but it's becoming easier and easier for me personally to spend a year this way and I wonder if there could be some benefit of this. On the other hand it seems kind of weird that you could have no tax liability and there is probably some catch.
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could you possibly share more details about your case?
maybe countries involved (if you can publish this)?
how did you prove this? did you do it voluntarily or have you been asked to provide proofs?
do you know if this is then also applied to the companies you own - the country of your residence and decision making is then uncertain which should impact the taxation of such a company...
maybe countries involved (if you can publish this)?
how did you prove this? did you do it voluntarily or have you been asked to provide proofs?
do you know if this is then also applied to the companies you own - the country of your residence and decision making is then uncertain which should impact the taxation of such a company...
The company will be taxed wherever it's registered, if there are corporate taxes there. Some exceptions may apply. Some places don't tax on income generated outside their territory. Company location is easy, just look for somewhere that doesn't tax at all. The real key is the location of the beneficiary owner. If you can make sure you never are in one place more than the 180 days, then go for it. I would love to do that but can't because of family.
second that.. you relocate in order to avoid taxes and if possible not stay anywhere more than 180 days at a time. It's not difficult to setup a tax free company for instant in Seychelles, Belize, Cyprus, BVI and many other places.
It should be noted that the 183 days rule isn't enough for certain countries. If your home country is New Zealand or UK, for example, cutting tax residency ties is a much more complex subject as they analyze your "intention" of leaving and other subjective considerations.
So, make sure to check your home country regulations before doing that. In certain cases, it might help or even be necessary to establish residency in a country that doesn't tax foreign income. You can do that easily in Panama or Paraguay. Once you have a tax certificate from such a country, you're safe to go.
So, make sure to check your home country regulations before doing that. In certain cases, it might help or even be necessary to establish residency in a country that doesn't tax foreign income. You can do that easily in Panama or Paraguay. Once you have a tax certificate from such a country, you're safe to go.
You know some agency service in Paraguay that can setup companies? if so, do you know the costs and want to share with us?
On Google if you put the following Keyword " Paraguay Company Incorporation " you will see a range of price start 1k5 USD up to 12k5 USD. After is the Agent are legit or no, I don't know. But someone who put effort on his SEO website on such competitive market (The Incorporation of Company) is still a good indication.
I can confirm this also applies to my country - it's not only about 183 day but also about the country where you have the "long-term interest" and can be considered you domicile by other signs (like frequently used house, owned companies running in your town etc.), which is sadly something what tax man can decide on his own :-(
Hello, my local agent in Paraguay can setup companies, buy real estate, and whatever else you need. Very competent guy with 20 years+ in business. I can share his contact by PM.
However, I didn't setup a company in Paraguay as I didn't need one. Paraguay has very lax residency laws and you can become a permanent resident quickly, and the cost is minimal. Once you have your Paraguayan ID, you can:
- Setup a personal USD bank account in Asunción
- Travel around Mercosur without a passport
- Trigger tax residency in Paraguay, a country that doesn't tax personal foreign income
How to trigger tax residency if you aren't spending over 183 days in Paraguay?
First it should be noted that you don't lose your permanent resident status by not spending time there. The stay requirement is minimal (1 day every 3 years). As a legal resident, but in practice no living there 183 days per year, you can still become a tax resident of Paraguay by renting out a small apartment or doing some local investment, thus paying some minimal local tax. Then you have a tax certificate which you can show to the tax man of your home country and make a strong case that you are NOT a resident there anymore.
As you see, this solution is for zeroing personal income tax.
Hope it makes sense!
But not arbitrarily. As enceladus says, if you can point to substantial evidence that you really are domiciled elsewhere, even if that location is tax-free, the tax man will have to relent.
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