I suppose CRS is only for bank accounts ....?
So if I get a corporate bank account in a non CRS country , I should be safe...?
So if I get a corporate bank account in a non CRS country , I should be safe...?
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Offshore companies get reported as well ?
- Thread starter Piano
- Start date
I believe that within the EU, there is an information exchange on company formation as well, but I could be mistaken.
120% sure you get reported if you hold an account at any bank in this world except Russia, Somalia, Nigeria or any island unknown to the public!
Let me clarify this to you with some more explanation.
Here you can find a list with countries that are not part of the CRS for now:
https://www.oecd.org/tax/transparency/AEOI-commitments.pdf
As you can see and the list itself says you have only a few Developing Countries left that are not part of CRS.
You have to ask yourself if you really want to bank your money in such countries.
The smarter way that is much more longterm is to go with a residence by investment and open bank accounts with this residence:
https://www.oecd.org/tax/automatic-...sistance/residence-citizenship-by-investment/
The easiest and affordable is the UAE residence. You don't need to invest in government fonds or buy real estate. You simply setup the company that grants you the residence visa. With this residence visa you open local UAE bank accounts. As you setup the bank accounts with the residence visa the banks consider you as a resident and doesn't report under CRS. The interesting thing: to keep your residence you simply have to be in the UAE every 180 days for 24 hours. That's it.
This solution has no expiry date compared to banking in non-CRS Developing Countries. That's said beside of the general risk you take by banking in Developing Countries.
Here you can find a list with countries that are not part of the CRS for now:
https://www.oecd.org/tax/transparency/AEOI-commitments.pdf
As you can see and the list itself says you have only a few Developing Countries left that are not part of CRS.
You have to ask yourself if you really want to bank your money in such countries.
The smarter way that is much more longterm is to go with a residence by investment and open bank accounts with this residence:
https://www.oecd.org/tax/automatic-...sistance/residence-citizenship-by-investment/
The easiest and affordable is the UAE residence. You don't need to invest in government fonds or buy real estate. You simply setup the company that grants you the residence visa. With this residence visa you open local UAE bank accounts. As you setup the bank accounts with the residence visa the banks consider you as a resident and doesn't report under CRS. The interesting thing: to keep your residence you simply have to be in the UAE every 180 days for 24 hours. That's it.
This solution has no expiry date compared to banking in non-CRS Developing Countries. That's said beside of the general risk you take by banking in Developing Countries.
So you want to say that the HK government reported your company, not the bank ? How do you know this ?
how do you know about the 250K limit ?
Can you place your address with a friend or you need a rent contract to show to the government ?
You get the residence Visa in UAE without any address. The Emirates ID (local ID card) you receive together with Visa will be send to central post office for collection.
When it comes to the UAE you have to forget about all that EU things with postal code and proof of address.
Sounds good, but I need to give my country in Europe my new address where I live or is that not necessary to prove that I am tax resident in UAE ?
Didn’t your country where you had your tax residence ask for this ?
a residence card does not make you automatically tax resident in that country , that is something a lot of people don’t realise....
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”
He didn’t understand the enormous difference between being a resident of a country and being a tax resident.
Qualifying for a residence permit may only require that you spend one day a year in a particular country, which may not subject you to any kind of taxation at all. And if you choose to physically reside in a country, that won’t necessarily mean that you will be a tax resident there, either. Some countries even have tax exemptions that keep you from becoming a tax resident for the first few years of your residence.
Every country has its own set of criteria to determine if you are legally required to pay taxes there. Those criteria are separate from the requirements to obtain a residence permit. That is why it is entirely possible to meet the criteria to obtain a residence permit without also meeting the criteria to become a tax resident of the country (and vice versa).
The point of having a second residence is to give yourself the legal right to enter and reside in a country. Maybe it’s a country that you want to live in, maybe it’s a plan B. Maybe you want the legal rights and business opportunities attached to that residence permit as a gateway to new markets and investments.
There isn’t a simple, magic-bullet answer for every personal situation and every country. There are so many uses and reasons for obtaining a second residence. And each country offers something unique. But in some cases, a residence permit can also be part of a tax non-residence strategy. “
He didn’t understand the enormous difference between being a resident of a country and being a tax resident.
Qualifying for a residence permit may only require that you spend one day a year in a particular country, which may not subject you to any kind of taxation at all. And if you choose to physically reside in a country, that won’t necessarily mean that you will be a tax resident there, either. Some countries even have tax exemptions that keep you from becoming a tax resident for the first few years of your residence.
Every country has its own set of criteria to determine if you are legally required to pay taxes there. Those criteria are separate from the requirements to obtain a residence permit. That is why it is entirely possible to meet the criteria to obtain a residence permit without also meeting the criteria to become a tax resident of the country (and vice versa).
The point of having a second residence is to give yourself the legal right to enter and reside in a country. Maybe it’s a country that you want to live in, maybe it’s a plan B. Maybe you want the legal rights and business opportunities attached to that residence permit as a gateway to new markets and investments.
There isn’t a simple, magic-bullet answer for every personal situation and every country. There are so many uses and reasons for obtaining a second residence. And each country offers something unique. But in some cases, a residence permit can also be part of a tax non-residence strategy. “
WHAT MAKES YOU A TAX RESIDENT ?
”
The other part of this subject that creates a lot of confusion for people is what exactly makes them a tax resident. It used to be that there was a fairly simple test that would determine whether you were taxable in the country based on how many days you spent there.
The magical number for this test was 183 days. If you spend any amount of time less than that in the country, you wouldn’t be taxed there.
While some countries still use this test, the situation right now is much more complicated. For the most part, building your offshore strategy around this test is not going to help you much these days.
Under the days test, people would simply make sure that they never spent 183 days anywhere. Now, governments want to know what country you have the closest connection to, and that means not only spending time but also establishing other connections in that country.
Where is the center of your life? Where is your family? Where do you have a place with available accommodation? Where else are you liable to pay tax? These are all factors that are going to be considered.
If you can’t point to a place where you have these types of connections and you choose to spend 182 days in Canada each year, your case for tax non-residence in Canada is not going to be very convincing.
Now, there are certain emerging or newly developing countries around the world with tax systems that aren’t as strict or robust that may still rely strictly on the days test. For example, I have residence in a country with a fairly cut-and-dry 183-day standard. If I spend 183 days or more in the country, I am a tax resident. If I spend 182 days or less there, they don’t care. I’m not their tax resident.
Most countries in the western world have more shades of gray when it comes to determining tax residence. I’ve told numerous stories before in which a guy left something as simple as a surfboard behind and the western government determined that it was enough of a connection to consider him a tax resident.
To avoid situations like that, you need to do some proper planning. It’s possible to be nomadic – you don’t have to be chained to one place the entire year – but you need to plan. You need a new jurisdiction that operates as your fiscal residence so that you can answer the question, “Where are you liable to pay tax?”
There are some countries where you can become a tax resident and “be liable to pay” zero tax. But without proper planning, you could still end up getting a knock on your door about a surfboard you left somewhere back home. With planning and proper execution, however, you can successfully leave your high-tax residence behind.”
”
The other part of this subject that creates a lot of confusion for people is what exactly makes them a tax resident. It used to be that there was a fairly simple test that would determine whether you were taxable in the country based on how many days you spent there.
The magical number for this test was 183 days. If you spend any amount of time less than that in the country, you wouldn’t be taxed there.
While some countries still use this test, the situation right now is much more complicated. For the most part, building your offshore strategy around this test is not going to help you much these days.
Under the days test, people would simply make sure that they never spent 183 days anywhere. Now, governments want to know what country you have the closest connection to, and that means not only spending time but also establishing other connections in that country.
Where is the center of your life? Where is your family? Where do you have a place with available accommodation? Where else are you liable to pay tax? These are all factors that are going to be considered.
If you can’t point to a place where you have these types of connections and you choose to spend 182 days in Canada each year, your case for tax non-residence in Canada is not going to be very convincing.
Now, there are certain emerging or newly developing countries around the world with tax systems that aren’t as strict or robust that may still rely strictly on the days test. For example, I have residence in a country with a fairly cut-and-dry 183-day standard. If I spend 183 days or more in the country, I am a tax resident. If I spend 182 days or less there, they don’t care. I’m not their tax resident.
Most countries in the western world have more shades of gray when it comes to determining tax residence. I’ve told numerous stories before in which a guy left something as simple as a surfboard behind and the western government determined that it was enough of a connection to consider him a tax resident.
To avoid situations like that, you need to do some proper planning. It’s possible to be nomadic – you don’t have to be chained to one place the entire year – but you need to plan. You need a new jurisdiction that operates as your fiscal residence so that you can answer the question, “Where are you liable to pay tax?”
There are some countries where you can become a tax resident and “be liable to pay” zero tax. But without proper planning, you could still end up getting a knock on your door about a surfboard you left somewhere back home. With planning and proper execution, however, you can successfully leave your high-tax residence behind.”
Let me explain it in detail. The Dubai Company Formation grants you the residence Visa in Dubai. With the residence Visa you can open local business and personal bank accounts. The local UAE banks consider you as local resident with the Visa and therefore no CRS reporting of your financial statements within UAE banks happen to your home country. To keep this active you simply have to be every 180 days for minimum of 24 hours in UAE. That's the UAE side.
What you mean it the tax certificate that you get if you stay more then 183 days within the UAE. It's required if you want to remit the funds back to your home country tax free. Many clients from us using their UAE bank accounts as saving accounts abroad and once they want to have the money back in their home country they simply move 2-3 years to UAE for 6 months each year to get the tax certificate and be able to remit all the UAE bank money tax free to their home country.
In this case how is the money moved to their UAE savings accounts while being a tax resident in their home country? Invoicing your home countries company from the UAE company? What are the invoices for? I would assume invoicing consultation and stuff like that would result in a lot of questions from the home country banks, requiring proof of the consultation work, contracts etc.
Yes it depends much on the home country. For high tax hells like Germany we have very good workarounds.
Some clients have source of funds / business partners that are fine with UAE company replaces the local home country company and they just transfer the funds directly to the UAE company instead of to the home country. Depens heavily on your business sector.
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