Tax resident of nowhere while staying in EU?

[JohnnyDoe]

if the person spends like 4 months in Ireland, 4 months in Estonia and the rest in the Czech Republic

Chances are he will have to pay lawyers (at least) in 3 different countries.

 

[Cloudbanck]

Chances are he will have to pay lawyers (at least) in 3 different countries.

I mean you are legally not even close to come into the tax net in any of the 3 countries in this situation. But yes, sometimes, tax authorities go after you anyway, so key is to avoid the countries with the most aggressive tax authorities like Spain or the Netherlands. And also if you are a known/famous person and/or have a large fortune, then the risk is much higher.

But ideally for the regular Joe digital nomad type, none of the three countries would even know of Joe's earnings that can be in a business outside the EU, and there would be no requirements for tax reporting as Joe wouldnt be a tax resident in any of the countries. It wouldnt even show up on the radar of the tax agencies, unless they read in the news about Joe.

So if you meet the two criteria, not showing up on the radar and also being completely legal, I wouldnt worry too much.

 

[Konstanz]

I mean you are legally not even close to come into the tax net in any of the 3 countries in this situation. But yes, sometimes, tax authorities go after you anyway, so key is to avoid the countries with the most aggressive tax authorities like Spain or the Netherlands. And also if you are a known/famous person and/or have a large fortune, then the risk is much higher.

Not necessarily. You can have problems with countries like Estonia. They don't have many expats , or foreign Holiday owners , so you can easily get interest by authorities

I would say in big countries like France, Italy you can more easily live in a shadow if you are not resident or citizen

Also is not cheap to live in 3 different countries

 

[Cloudbanck]

Not necessarily. You can have problems with countries like Estonia. They don't have many expats , or foreign Holiday owners , so you can easily get interest by authorities

Fair point, but Estonian authorities arent like dicks. And unlike many other EU countries rules are short and quite clear. They say: "To determine a person’s place of residence, it is important that the place of residence would be permanent and lasting, i.e. it must be apparent that the person has made preparations or efforts for making the place of residence permanently available for himself or herself all the time, not acquired for the purpose of short-term dwelling (a holiday trip, a business trip, a study trip, training courses, etc.). Possession of property (as well as an immovable) in Estonia itself does not make a person a resident for the purposes of the Income Tax Act."

A 4 month's stay is clearly not permanent and lasting. But yeah, a small place isnt great for the "radar" aspect.

I would say in big countries like France, Italy you can more easily live in a shadow if you are not resident or citizen

Mm, but there authorities can be dicks, and being a tax resident in France or Italy but living in the shadows is a whole different risk level.

 

[JohnnyDoe]

Fair point, but Estonian authorities arent like dicks.

Have you ever been in court in any of the so called Baltic countries? Their nonchalance in ignoring their own laws is amazing, especially when there is money to be grabbed.

 

[TRGali]

He has to check the rules for each country where he has ties/spends more than ~90 days per year, or returns frequently.
Even without CoVI, he can be liable for tax.



Complete nonsense.



Not really.



Complete nonsense. Switzerland even explicitly excludes visits for health reasons from tax residency.



Nonsense.



Nonsense.

Not sure where you got all these ideas from, but you're very, very wrong.
I'm not saying there aren't countries that may have such rules, especially for citizens, but you can't just generalize this based on the rules of one country.

Many of these are from the OECD DTA template agreement used by most countries, they are not non sense (sadly). Depending on the country challenging your residency, they may ask for a TRC of the country where you claim residency and then can compare, as per the DTA between the 2 countries, in which of the 2 countries you have the most ties. And I guess this is just one way they can try to screw with you.

 

[AndyAresa]

Hello everyone,

I thought this could be a suitable space to discuss a kind of similar matter.

I am thinking of buying a small real estate in the EU, outside the country of my tax residence. I plan to spend there a couple of months per year, but it will be available for me all year round. I have not decided on a country yet. From your experience, in which EU countries do I run a risk of becoming a tax resident just because of owning the real estate and spending some time there? And conversely, in which EU countries this is definitely ok, no tax residence is triggered?

 

[JohnnyDoe]

Hello everyone,

I thought this could be a suitable space to discuss a kind of similar matter.

I am thinking of buying a small real estate in the EU, outside the country of my tax residence. I plan to spend there a couple of months per year, but it will be available for me all year round. I have not decided on a country yet. From your experience, in which EU countries do I run a risk of becoming a tax resident just because of owning the real estate and spending some time there? And conversely, in which EU countries this is definitely ok, no tax residence is triggered?

If you pay your taxes in your country of residence and only spend a couple of months per year in the small real estate for holidays you have nothing to worry. Any EU country is fine.

In fact, the EU is a very good place for holidays, and its only future is as an amusement park for non-Europeans.

 

[Cloudbanck]

Have you ever been in court in any of the so called Baltic countries? Their nonchalance in ignoring their own laws is amazing, especially when there is money to be grabbed.

No, only had girlfriends in the baltics, never dealt with their legal systems. So probably optimised my experience that way.

But the three countries are quite different, have you been in court in Estonia, how was that/what happened?

 

[daniels27]

If you pay your taxes in your country of residence and only spend a couple of months per year in the small real estate for holidays you have nothing to worry. Any EU country is fine.

In fact, the EU is a very good place for holidays, and its only future is as an amusement park for non-Europeans.

It is like Europa Park in Rust. Just that it now spans the whole continent like a museum.

 

[JohnnyDoe]

No, only had girlfriends in the baltics, never dealt with their legal systems. So probably optimised my experience that way.

Makes sense.

But the three countries are quite different, have you been in court in Estonia, how was that/what happened?

Unfortunately court records are not available to the public.
The 3 countries work and think the same way, and will grab your money at the first occasion. Even more so now that they have to pay higher electricity bills and their population is constantly shrinking.
Depressing places.

 

[daniels27]

Makes sense.

Unfortunately court records are not available to the public.
The 3 countries work and think the same way, and will grab your money at the first occasion. Even more so now that they have to pay higher electricity bills and their population is constantly shrinking.
Depressing places.

They also chased you there? I thought only Italy.

 

[JustAnotherNomad]

Many of these are from the OECD DTA template agreement used by most countries, they are not non sense (sadly).

DTAs cannot introduce new tax liabilities. I wish we didn't have to explain such basic facts over and over again.

 

[JustAnotherNomad]

I am thinking of buying a small real estate in the EU, outside the country of my tax residence. I plan to spend there a couple of months per year, but it will be available for me all year round. I have not decided on a country yet. From your experience, in which EU countries do I run a risk of becoming a tax resident just because of owning the real estate and spending some time there? And conversely, in which EU countries this is definitely ok, no tax residence is triggered?

Doesn't really matter. There are a bunch of countries where it would trigger tax residency and a bunch of countries where it wouldn't.
But that doesn't really matter if you live in a treaty country and have strong ties to that country. The treaty will protect you.

 

[JustAnotherNomad]

One cant generalise across all EU countries like that. They all have different rules for what's considered in their tax net and different enforcement.

Correct.

Some countries mainly have plain days tests like Estonia or Ireland,

You are also Estonian tax resident if you declare your residency there. No need to spend time there.
But otherwise it seems to be days only, mostly.

others have significant ties like the nordics (excluding Norway that is outside the EU and have a brutal 3 year of taxation by citizenship),

No, most of them are residency and/or days spent and/or habitual abode, the rules are quite similar to e.g. Germany.
You are confusing this with their strict rules for getting out of the tax net again (which usually only kick in after X years of living in the country and/or having citizenship).

For example, I believe you usually cannot own Scandinavian real estate in your own name if you want to be considered non-resident for tax purposes and you are a citizen who has lived there for 10+ years (unless you move to a treaty country).
But buying real estate in Scandinavia wouldn't make you tax resident by itself if you don't live in it yourself.

and yet others like the Netherlands and I think Germany that have what I call unclear ties that can be lots of stuff like a gym subscription, a car, a key to an apartment, doctor registration, a bank account, a golf club membership, etc.

A key to an apartment triggers tax residency because it means you have a residence there (whether declared or not).

The other factors don't trigger tax residency, but they can be used to argue you have "habitual abode" in Germany (=more than just a temporary visit). So it is taken into account to find out what the intention of your stay was - is it your home or are you just visiting? There is no way to become a German tax resident just because you have a German golf club membership and gym subscription if you never spend time there.

Then we have Spain, France and Italy that have quite complicated rules around the concepts of center of vital interest, permanent abode, economic interests, professional activities.

They're not that different? They just typically have stricter rules for their citizenships, similar to what the Nordic countries have, but usually for everyone who has lived there for 10+ years, not only based on citizenship.

So you can own a house in Ireland no problem, but you cant in Sweden at least if you have ever lived in it, because it would be a significant tie. And for other countries, yeah maybe you can own a house, if you make sure your centre of vital interest/permanent abode etc is elsewhere.

So it totally depends on which EU countries that you spend time in and have assets in, and also if you are a citizen of an EU country and have spent many years in that or another EU country - then you have to be particularly careful about that country.

Exactly, like I said.

 

[TRGali]

DTAs cannot introduce new tax liabilities. I wish we didn't have to explain such basic facts over and over again.

I don't really appreciate that tone, especially while I have not asked for an explanation nor previously stated such thing.