The POEM Issue

[ilpablo]

Hi everyone.

So can someone help me to understand this issue?

The POEM issue has been mentioned many times on this forum and it seems to be a major problem for anyone looking to manage a foreign company.

However, speaking with local accountants/lawyers in different countries I've got many different answers.

I consulted with accountants/lawyers in Malta, Romania, and Croatia and many of them told me it's not a problem at all if I move to their country and I keep doing my business with a foreign company (no employees, no office, just me as director). What I have to do is just pay my personal taxes in their country (salary, dividends, other personal income).

I'm a bit confused about this. Can someone help me to clarify this once and forever about this issue?

In Italy this is a big problem for the tax administration, maybe those other countries don't have or apply the same rules.

If I don't reside effectively in this particular location 365 days a year, it can be difficult to demonstrate that the company is actually "effectively managed locally", or does just the fact of becoming a local resident trigger this rule anyway?

Let's say I stay in the country for 185 days, and I stay outside the rest of the time. Is this a problem at all?

Should I go to the UK regularly to show any activity or just being outside my country of residence could let me avoid the presumption that I manage a foreign company inside that particular country?

I hope I didn't overcomplicate my question.

Thanks y'all in advance for the help!

 

[JustAnotherNomad]

I consulted with accountants/lawyers in Malta, Romania, and Croatia and many of them told me it's not a problem at all if I move to their country and I keep doing my business with a foreign company (no employees, no office, just me as director). What I have to do is just pay my personal taxes in their country (salary, dividends, other personal income).

I'm a bit confused about this. Can someone help me to clarify this once and forever about this issue?

It's very simple:

1. Many advisors are simply uneducated. Especially when they are only simple accountants and not tax lawyers specializing in international taxation. So there's a good chance you were simply misinformed.

2. Some countries have such rules in theory, but don't have the resources or will to effectively enforce them, or corruption may be wide-spread. So the law may say one thing, but the practice can differ vastly. Especially with Cyprus, this could be intentional. On paper, they are compliant with all the anti-avoidance rules, but in practice, a lot may still be possible.

3. Sometimes advisors will simply lie to you because they try to sell you something.

But in general, all EU countries have such rules.