Our valued sponsor

Unique Payment
Sword and Shield

Relocating to a Country Without a DTA: Does It Make Sense?

JSA

JSA

New member
Nov 15, 2024
23
11
3
Munchkinland
#1
Hi everyone,

Does it make sense to move to a country (i.e. Andorra) that has no DTA with my home (which is not on any of those black/gray lists, btw) country? How would this impact my tax obligations?
 
#2
Yes, this makes sense.

The DTA is only useful if your either spend time on both countries or have any sort of investment in the other country. If you have no company, shares etc. from your current country, you won't need a DTA.

You can live very well in countries without DTA. Just notice that you cannot claim any treaty benefits. Could you maybe tell us more about your investments and business?
 
Last edited:
  • Like
Reactions: JSA
#4
Pretty much anything. But it depends on the country. Some countries charge withholding taxes on
  • Interest from bank account
  • Dividends
  • Royalties
If you have a DTA, you may benefit from a reduced rate

If you have a company doing business in the US, a UK company can benefit from a DTA and this cannot be taxes for certain activities defined in the DTA while a company in Hong Kong does not get any such benefits.
 
  • Like
Reactions: JSA
#6
Relocate to the country of your choice and with the best tax regulations for your needs and forget about the DTA !
 
  • Like
Reactions: JSA
#7
blizz said:
Relocate to the country of your choice and with the best tax regulations for your needs and forget about the DTA !
Click to expand...
Depends on his income. If he had mostly royalties from US, he may want a place with favourable treaties. If he has a big estate in the US and is 90, same.

In the general case, forget about it!
 
#10
Trading? What is that?

The problem with that term is that stock traders use it like if it could only mean that. And then, there is Trader's Joe that is selling products and uses the term alike.

And now don't come with "I am in securities." Because that is equally nonsense. How am I supposed to tell whether your are a 120kg mate from the gym kicking idiot's asses in front of brothels or whether you are a styled wannabe sitting in fancy glass houses wasting your life in getting it a computer bubbling about financial derivatives you don't even understand what it is?
 
Last edited:
  • Like
Reactions: Armani
#11
To get a useful answer, we need to know
  • Where and what is your income from
  • Where and how do you hold assets
  • What is your remaining life expectancy and do you care about your inheritors
Remember, the DTA benefits are about
  • Royalties
  • Interest
  • Dividends
  • Permanent establishments
  • Self employment
  • Inheritance taxes
  • Extraction of raw material and people's money (Telco business, insurance, etc.)
I once told people not to use lawyers. Why? Because it is like here. There always is a general answer. But then there are special cases where that does not hold. The problem here is that on OCT, almost all cases are special. That's why all these guys from "a European country" having "some sort of income" wishing to own a Unicron are hard to get any help which does not leave room for uncertain troubles later.
 
Last edited:
  • Like
Reactions: JSA and JackAlabama
#12
daniels27 said:
Trading? What is that?

The problem with that term is that stock traders use it like if it could only mean that. And then, there is Trader's Joe that is selling products and uses the term alike.

And now don't come with "I am in securities." Because that is equally nonsense. How am I supposed to tell whether your are a 120kg mate from the gym kicking idiot's asses in front of brothels or whether you are a styled wannabe sitting in fancy glass houses wasting your life in getting it a computer bubbling about financial derivatives you don't even understand what it is?
Click to expand...

I was referring to equities, sorry. I primarily trade stocks and crypto using Binance and IBKR, and I’ve been at it for almost five years now.

As for my assets, they’re entirely in crypto and stocks -- I don’t own any real estate. My main focus at the moment is growing my wealth. I’m 31 years old, and I don’t have any children, nor planning on having any in the near future.
 
  • Like
Reactions: Armani
#13
If you don't rely on dividends and withholding tax avoidance, you can forget about DTAs. They do not contain any benefits available to you unless you spend time in both countries or otherwise need to avoid being taxed in your old country. (In seeing countries you could be tax resident in the year you move out it after in certain cases, US or UK would be examples.)
 
  • Like
Reactions: JSA
#14
daniels27 said:
If you don't rely on dividends and withholding tax avoidance, you can forget about DTAs. They do not contain any benefits available to you unless you spend time in both countries or otherwise need to avoid being taxed in your old country. (In seeing countries you could be tax resident in the year you move out it after in certain cases, US or UK would be examples.)
Click to expand...
I’m planning to move to another country and won’t be dividing my time between two places. I might visit my home country once or twice a year for a couple of weeks to see friends and family.

I was just concerned that the lack of a DTA between the two countries would mean I’d be taxed in both, that's all.
 
#16
JSA said:
I was just concerned that the lack of a DTA between the two countries would mean I’d be taxed in both, that's all.
Click to expand...

It really depends on your home country.
For example, some Scandinavian country (can't remember which one) has a rule that you still are tax resident (=have to pay tax there) for X years after you move abroad, unless you move to a country with a DTA.
Most countries have such a rule though.
 
  • Like
Reactions: JSA
#17
JustAnotherNomad said:
It really depends on your home country.
For example, some Scandinavian country (can't remember which one) has a rule that you still are tax resident (=have to pay tax there) for X years after you move abroad, unless you move to a country with a DTA.
Most countries have such a rule though.
Click to expand...
I'm not from the Nordics, but yeah it might be a good idea to consult with a tax lawyer first,
 
#19
JustAnotherNomad said:
It really depends on your home country.
For example, some Scandinavian country (can't remember which one) has a rule that you still are tax resident (=have to pay tax there) for X years after you move abroad, unless you move to a country with a DTA.
Most countries have such a rule though.
Click to expand...
Sweden
https://www.skatteverket.se/service...vingfromsweden.4.7be5268414bea064694c58f.html

UK and US have some rules too. But in general I would argue only a very limited number of countries have such rules and are able to enforce then. Mainly the EUSSR and there it is not that many.
 
  • Like
Reactions: JSA
#20
No, judging by the article above it's not Sweden. Sweden just has strict rules about what is considered a tie for tax residency purposes.
If you really cut all ties, you won't be considered tax resident.

Google says it's Norway:
https://www.skatteetaten.no/en/person/taxes/get-the-taxes-right/abroad/tax-emigration/

"If your total period of residence in Norway was more than 10 years before moving from Norway, your tax liability to Norway can only end three years from the moment when you settle permanently abroad. This means that you’re still liable to pay tax to Norway in the year you move and for at least three more years."

But a DTA can overrule this. So it's advisable to move to a treaty country for at least three years.

And yes, this is rare, but if OP is from Norway, then it's of course relevant for them. So there is no 100% general answer to OP's question.
 
  • Like
Reactions: JSA and daniels27
You must log in or register to reply here.

Forum Announcement

Latest Threads

Top Bottom
Back