UAE (Dubai) Expats: What moves will you make with the new UAE tax laws?

[yngmind]

Yes it depends on passport.
But if it's EU passport, I doubt that

Agree.

 

[JustAnotherNomad]

Any proper lawyer would tell this set-up is illegal

Why? What laws would it be breaking?

and most likely cause problems either with tax authorities

In which country?

or banks

Why?

If you are not tax resident in Thailand so where are you tax resident then?

I don't know, you tell me.

If you claim tax resident on documents yourself, all authorities will treat you like Thai tax resident - no questions asked.

Fine by me. Thai tax residents only pay tax on income that is remitted to Thailand in the same year as it was earned. I would be fine with paying tax on such income.

Why you guys love Thailand so much , but why not just do Caribbean?

I have only been to the USVI, I don't think it's really my thing. I prefer bigger cities, good international flight connections.

Is it just because it's "cheap" in Thailand. Yes it's cheap for low quality. But do we really live like bagpackers and eat street food?

Have you actually been to Thailand? The quality is much higher than e.g. in the UAE.

To be safe, we can get a tax residency in Paraguay for $1-3k a year. I don't remember the cost.

No, you'd have to spend 120 days per year in Paraguay. It's similar to Thailand.

Your passport country would trigger tax residence if you don't have some normal tax residence some place

Please show me where that is written.

 

[yngmind]

Why? What laws would it be breaking?



In which country?



Why?



I don't know, you tell me.



Fine by me. Thai tax residents only pay tax on income that is remitted to Thailand in the same year as it was earned. I would be fine with paying tax on such income.



I have only been to the USVI, I don't think it's really my thing. I prefer bigger cities, good international flight connections.



Have you actually been to Thailand? The quality is much higher than e.g. in the UAE.



No, you'd have to spend 120 days per year in Paraguay. It's similar to Thailand.



Please show me where that is written.

No, you actually need to be there for 1-day every 3 years.

 

[JustAnotherNomad]

Yes it depends on passport.
But if it's EU passport, I doubt that

Please show me a single case where someone with an EU passport was tax resident in their home country based on their citizenship alone, without spending time in their home country or having other ties like an apartment.

No, you actually need to be there for 1-day every 3 years.

Paraguay? I believe it's one day in 10 years. But that's just to keep the visa active. It's like the UAE. You have to be there from time to time, or your visa will lapse. But you don't have tax residency there if you don't spend 120 days per year in Paraguay.
The residency/visa only gives you permission to live there. You have to actually spend time there to be considered tax resident.
But even if you were considered tax resident in Paraguay, that doesn't mean you can't also be considered tax resident somewhere else. Paraguay doesn't have that many tax treaties either. So I don't really see value in a PY residency.

 

[Konstanz]

Please show me a single case where someone with an EU passport was tax resident in their home country based on their citizenship alone, without spending time in their home country or having other ties like an apartment.

Having passport itself is a connection. Without other tax residence you are resident in home country
If you are Thai tax resident then good enough. Probably it would not trigger home country
But when you are investigated by inspector it would be very hard to proof you are not tax resident in home country when you cannot suply other country tax residence certificate and other proof of tax residence

 

[yngmind]

Please show me a single case where someone with an EU passport was tax resident in their home country based on their citizenship alone, without spending time in their home country or having other ties like an apartment.



Paraguay? I believe it's one day in 10 years. But that's just to keep the visa active. It's like the UAE. You have to be there from time to time, or your visa will lapse. But you don't have tax residency there if you don't spend 120 days per year in Paraguay.
The residency/visa only gives you permission to live there. You have to actually spend time there to be considered tax resident.
But even if you were considered tax resident in Paraguay, that doesn't mean you can't also be considered tax resident somewhere else. Paraguay doesn't have that many tax treaties either. So I don't really see value in a PY residency.

How can I become a Tax Resident in Paraguay?​

Usually, tax residency is established when you stay in a country for more than 183 days, but to get Paraguay's tax residency you do not have to stay so long. They only ask you to come once every three years.


There is a lot of value in that tax residency. If your country or bank asks where are you a tax resident, you show them the Paraguay tax id and they will accept it

 

[jafo]

https://visadb.io/blog/how-to-becom...without-living-there-62cf1662a7fcdcd95e3300b2

This was discussed before here: Paraguay temporary residence - 0% tax income from abroad or not?

 

[JustAnotherNomad]

Having passport itself is a connection. Without other tax residence you are resident in home country

Please show me the law. Or at least just a single case with such a ruling. Shouldn't be difficult if there was any substance to your claim.

to get Paraguay's tax residency you do not have to stay so long. They only ask you to come once every three years.

Maybe use a more credible source? They don't even understand the difference between residency and tax residency.

An individual is deemed to be tax-resident in Paraguay if one spends more than 120 days in a year in the country.

https://taxsummaries.pwc.com/paraguay/individual/residence

 

[Cloudbanck]

Having passport itself is a connection. Without other tax residence you are resident in home country

No, this is not how it works in the majority of EU and west European countries with a few exceptions.

Each country has it own rules for if you are a tax resident or not, and most do not check if you are a tax resident elsewhere. You usually have to enter an address somewhere else though, but what matters is that you dont meet the criteria for tax residency - and just having a passport is typically not such a criteria.

Examples:
Ireland - you cant be in Ireland more than 30 days in the calendar year after you leave Ireland, after that you can be up to half year in Ireland without becoming tax resident, and you can still own property have bank accounts in Ireland etc. You have to enter an address abroad (easily done online on revenue.ie), but Ireland will not tax you unless you spend too much time in Ireland.

UK - similar to Ireland, but multiple days tests. If you dont spend too much time living or working in the UK, you are not a tax resident in the UK, regardless of having a tax residency elsewhere or not (but you have to give an address abroad to HMRC).

Italy - You have to register at AIRE (Registry of Italians living abroad) and to do that you have to prove that you are a resident abroad which is a simple formality normally, but in tax havens they make it more difficult. After having registered with AIRE somewhere, you dont have to - in practice - be a tax resident there, but if you are a high profile case, Italy could check that you really dont have ties to Italy, and possibly - but Im not sure about this - that you really live in the country you say you live in.

Sweden - If you have significant ties to Sweden such as close family, permanent home, or a business, you are still considered tax resident in Sweden even if you live abroad. If you cut the ties, and dont spend more than like 3.5 months in Sweden, then you are not a tax resident in Sweden regardless of if you are a tax resident somewhere else or not (but you have to give an address abroad to the Swedish authorities).

Germany - Similar to Sweden but they have tougher criteria for the ties, included in the concept of habitual abode: access to a home (even if you just have a key but dont go there), a bank account, car ownership or gym membership in Germany can matter.

Norway - This is an exception: For the first 3 calendar years abroad you are still a tax resident in Norway but DTAs still apply. So if you move a to a country with no DTA to Norway - tough luck! After the 3 years it works like Sweden.
And notice that for Norway and most other European countries it's not the Norwegian passport that matters, it's having been living in Norway for at least 10 years - then you are in their tax net regardless of citizenship, and the 3 years apply to you.

France - They have an exception with Monaco, if you move there , your passport really works as a tie to France, and you are still considered a tax resident in France no matter how long you live in Monaco. For the rest of the world, I believe they check if your center of vital interest is in France, and if it isnt you are not a tax resident in France.

 

[JustAnotherNomad]

Thank you. That's exactly what I meant. Weird that few people understand this.

 

[Mercury]

If you live less than 6 month, that's fine.

Even if you live more than 6 months, that's fine too.

Whether you are considered resident or non-resident for tax purposes in Thailand, tax law enforcement is equal (close to none).

As long as you keep low profile, hold a proper permit to stay and don't do business within the country, you won't be bothered.

 

[troubled soul]

New change in Thai Elite will come in October....May be they include Tax free rule for elite visa holder......
Or
UAE allowed to run USA LLC from Dubai tax free.....

IMHO better to wait and watch.
Do not take any decision in rush.......UAE tax rule are not very clear in many aspects.....

 

[JackAlabama]

Having passport itself is a connection. Without other tax residence you are resident in home country
If you are Thai tax resident then good enough. Probably it would not trigger home country
But when you are investigated by inspector it would be very hard to proof you are not tax resident in home country when you cannot suply other country tax residence certificate and other proof of tax residence

No its not equally the same. Some places are ok if you can clearly show you are not there, doesn't matter where but just not there.

The country where your nickname is located in for sure is one of the most aggressive one where you gotta play it extra careful and what you say could apply.

 

[yngmind]

You can live without tax residency.

Just be a tax resident nowhere. If someone asks for the tax id, tell them the country doesn't issue a tax certificate for your citizenship, and most banks will approve it.

Btw why not use Paraguys tax id? Ok, you aren't a tax resident there, but do you need to be a tax resident of PY? Use the tax id, which the banks ask for, and be a tax resident nowhere.

For the tax forms, I'm not sure if you can use your Airbnb address, any ideas?

 

[Konstanz]

No, this is not how it works in the majority of EU and west European countries with a few exceptions.

Each country has it own rules for if you are a tax resident or not, and most do not check if you are a tax resident elsewhere. You usually have to enter an address somewhere else though, but what matters is that you dont meet the criteria for tax residency - and just having a passport is typically not such a criteria.

Examples:
Ireland - you cant be in Ireland more than 30 days in the calendar year after you leave Ireland, after that you can be up to half year in Ireland without becoming tax resident, and you can still own property have bank accounts in Ireland etc. You have to enter an address abroad (easily done online on revenue.ie), but Ireland will not tax you unless you spend too much time in Ireland.

UK - similar to Ireland, but multiple days tests. If you dont spend too much time living or working in the UK, you are not a tax resident in the UK, regardless of having a tax residency elsewhere or not (but you have to give an address abroad to HMRC).

Italy - You have to register at AIRE (Registry of Italians living abroad) and to do that you have to prove that you are a resident abroad which is a simple formality normally, but in tax havens they make it more difficult. After having registered with AIRE somewhere, you dont have to - in practice - be a tax resident there, but if you are a high profile case, Italy could check that you really dont have ties to Italy, and possibly - but Im not sure about this - that you really live in the country you say you live in.

Sweden - If you have significant ties to Sweden such as close family, permanent home, or a business, you are still considered tax resident in Sweden even if you live abroad. If you cut the ties, and dont spend more than like 3.5 months in Sweden, then you are not a tax resident in Sweden regardless of if you are a tax resident somewhere else or not (but you have to give an address abroad to the Swedish authorities).

Germany - Similar to Sweden but they have tougher criteria for the ties, included in the concept of habitual abode: access to a home (even if you just have a key but dont go there), a bank account, car ownership or gym membership in Germany can matter.

Norway - This is an exception: For the first 3 calendar years abroad you are still a tax resident in Norway but DTAs still apply. So if you move a to a country with no DTA to Norway - tough luck! After the 3 years it works like Sweden.
And notice that for Norway and most other European countries it's not the Norwegian passport that matters, it's having been living in Norway for at least 10 years - then you are in their tax net regardless of citizenship, and the 3 years apply to you.

France - They have an exception with Monaco, if you move there , your passport really works as a tie to France, and you are still considered a tax resident in France no matter how long you live in Monaco. For the rest of the world, I believe they check if your center of vital interest is in France, and if it isnt you are not a tax resident in France.

Just read double tax treaties between countries. Citizenship is one of the ties with the country what can be taken into account about tax residency.
About local laws I am not expert

For example from UK and UAE double tax treaty:

 

[Cloudbanck]

Just read double tax treaties between countries. Citizenship is one of the ties with the country what can be taken into account about tax residency.

Double tax treates are only relevant when two (or more) countries claim you as tax resident. When only one country or no country claims you as tax resident - which is what we are discussing here and is the case when you are out of the tax net - then double tax treaties are not used, cause you need two to tango.

But yes, in a situation where there is a double tax treaty, and you are in the tax net of two countries, like a Norwegian having left Norway two years ago and living in the UK, or a German living in Italy but having kept a key to an apartment in Stuttgart and still owns his german registered Porsche, then yes the citizenship (and lots of other stuff) might be factors to determine in which of the two countries taxes should be paid.

 

[Konstanz]

You can live without tax residency.

Just be a tax resident nowhere. If someone asks for the tax id, tell them the country doesn't issue a tax certificate for your citizenship, and most banks will approve it.

Btw why not use Paraguys tax id? Ok, you aren't a tax resident there, but do you need to be a tax resident of PY? Use the tax id, which the banks ask for, and be a tax resident nowhere.

For the tax forms, I'm not sure if you can use your Airbnb address, any ideas?

If you are just bagpacker most likely you are still tax resident in home country

Double tax treates are only relevant when two (or more) countries claim you as tax resident. When only one country or no country claims you as tax resident - which is what we are discussing here and is the case when you are out of the tax net - then double tax treaties are not used, cause you need two to tango.

But yes, in a situation where there is a double tax treaty, and you are in the tax net of two countries, like a Norwegian having left Norway two years ago and living in the UK, or a German living in Italy but having kept a key to an apartment in Stuttgart and still owns his german registered Porsche, then yes the citizenship (and lots of other stuff) might be factors to determine in which of the two countries taxes should be paid.

Yes but if home country would ask you to prove residence , double tax treaty would be taken into account ant that could be problematic

You have to have "home" new home country with utility bill, residence,address etc..

 

[JustAnotherNomad]

@Konstanz It's a treaty for the avoidance of double taxation. It can only reduce taxes, not introduce new ones.
This becomes very clear when you look at the very first sentence that you quoted:
"Where [...] an individual is a [tax] resident of both Contracting States, [...]"

Whether a person is tax resident in a country, is determined by that country's own laws, not the treaty. The treaty only takes precedence over the domestic law.
The part you quoted only means "If a person is considered tax resident in both countries under their respective tax laws, then the following rules shall apply to resolve this conflict, so that the person is only considered tax resident in one of the countries, so that double taxation can be avoided."

But if a person is only considered tax resident in one or in neither of the countries (under their domestic laws), then this article does not apply because the condition "resident of both Contracting States" is not fulfilled.
The tie-breaker rules don't have anything to do with the tax residency rules of the countries either, as others have pointed out. I don't think any Western country (except for the US) links tax residency to citizenship. A simple tax treaty can't introduce taxation that does not exist in the domestic law.

 

[Konstanz]

@Konstanz It's a treaty for the avoidance of double taxation. It can only reduce taxes, not introduce new ones.
This becomes very clear when you look at the very first sentence that you quoted:
"Where [...] an individual is a [tax] resident of both Contracting States, [...]"

Whether a person is tax resident in a country, is determined by that country's own laws, not the treaty. The treaty only takes precedence over the domestic law.
The part you quoted only means "If a person is considered tax resident in both countries under their respective tax laws, then the following rules shall apply to resolve this conflict, so that the person is only considered tax resident in one of the countries, so that double taxation can be avoided."

But if a person is only considered tax resident in one or in neither of the countries (under their domestic laws), then this article does not apply because the condition "resident of both Contracting States" is not fulfilled.
The tie-breaker rules don't have anything to do with the tax residency rules of the countries either, as others have pointed out. I don't think any Western country (except for the US) links tax residency to citizenship. A simple tax treaty can't introduce taxation that does not exist in the domestic law.

Agree , but good luck proving to French, or Spanish government you are not their tax resident because you are traveling around the world and not be able to produce new tax residence

All depends on your passprot

Hungary for example clearly links citizenship with tax residence.

In some other countries it's considered as one of the "tie". I agree that citizenship is not enough itself as in US. But it's very strong tie

 

[JustAnotherNomad]

If you are just bagpacker most likely you are still tax resident in home country

It's spelled backpacker and I don't understand at all what you are trying to say.
You can have a look at the UK tax residency flowchart:

https://assets.kpmg.com/content/dam/kpmg/pdf/2016/01/statutory-residence-test-flowchart.pdf

You will see there is no "lives in cheap hostels and has bad hygiene" criterion for tax residency.
If you don't fulfill the criteria for tax residency, you are not a tax resident in the UK. You can't be.

Yes but if home country would ask you to prove residence

You are making stuff up. Most countries ask for a new address. Very, very few countries will ask you to prove that you have a new tax residency.

, double tax treaty would be taken into account ant that could be problematic

You don't seem to understand the meaning of the terms "both Contracting States" and "double taxation".