- In most countries, the procedure is the same, but as said, there are sometimes exceptions, unfortunately…
A trip to the town hall.
In most countries you have to unsubscribe (online or not) at the town hall with the message: “Hello dear people, I’m definitely moving out of this city, village, country”. This will be noted and it is the first step on the way to endless freedom. In some countries, you will still have to contact the tax authorities separately and ask for your last tax bill. Other countries will inform the tax authorities immediately.
Do I have to sell all my real estate now?
You are moving from your home country and you still have some apartments there and your house for example. Do I have to sell all my real estate now? No, not at all. You can just rent it out and you will then pay property tax in your former country of residence. Just like those millions of people who have a second home in Spain or Portugal.
You can also keep your own home as a sanctuary. If you come over to say hello to your friends, you can still stay in your former home. Everyone can tell from the electricity consumption, including the tax authorities, that you only stayed there sporadically.
If, for example, you let your sister live in your flat when you discover the world, make sure you have a rental contract that you can always prove that you did not live in the flat. And put the utilities in her name.
Countries like Sweden, on the other hand, think it’s enough to keep a summer house on one of the Swedish lakes to fish for salmon in summer to tax you. So, get rid of that ‘sommarhus’.
Do I have to close my accounts?
Just because you’re leaving your country doesn’t mean you have to close all accounts. If for practical reasons, it is convenient for you to keep an account in your former home country, this is usually not a problem. It is different if, for example, you have an important share package managed by a local private banker. In some countries, having a locally managed share package can be a starting point to tax you. As in Belgium, this is called the “seat of fortune”.
A number of fiscally annoying countries such as the Scandinavian countries and the Netherlands, for example, still have an exit tax. If you have lived in Norway for more than 10 years before the year you leave Norway and reside somewhere else, your Norwegian tax liability will only end after the third year.
A number of countries such as Spain and Portugal, for example, have a blacklist. When a Spaniard emigrates to Dubai, he will have to pay his taxes for a while in the former country of residence. Maybe first move to another country…
For the tax authorities to prove? Usually (and this is often a misunderstanding) it is up to the tax authorities to prove that you are a tax victim in their country, in their predatory territory. For example, if you unregistered from the municipality and you have been out of the country for more than 183 days, it is up to the tax authorities to prove that you still have your tax residence there. You do not have to prove with your diary that you sailed for 100 days on a sailing boat in the Pacific Ocean, and spent the rest of your time in an ashram in Sri Lanka and toured Australia by train.
That annoying Norwegian taxman again.
In a number of countries like Norway, however, it will be up to the taxpayer to prove that he has a tax residence in another country. And this according to the rules of the other country. These can be quite complex thinking exercises.
No board positions in your company.
It is of course also best if you are a director in a company in your home country and then resign. If you want to keep that company, find another director. It is difficult to explain that you do not live in country A and still manage a company there on a daily basis. If you can remain a shareholder, this is not a problem.
Of course, there’s the practice…
What you read before is by the book. It is best that you indeed do everything strictly so that the tax authorities can’t ‘catch you’. Because the price you pay is high. But of course, the tax authorities aren’t always up to date with your whereabouts. A lot of countries are not working on you either. Once you have left the country (officially anyway), you are usually out of the tax authorities’ database. Not every country has a North Korean tax administration. This can have its advantages…
Attention! Stay away long enough. Some countries have rules that if you haven’t left the country long enough when you come back, you “weren’t really gone” for the tax authorities. You were on a long holiday… For example, the Belgian tax authorities want you to have your tax residence abroad for at least 24 months before you return. Otherwise, you wouldn’t be gone for them, and they can tax you on those last 24 months!
The first year after your departure, it never hurts to build up a file showing that you really live in a different place. Keep track of your boarding passes, rental contracts, utility bills, tax returns, passport stamps, gym club memberships, and so on. But again in most countries, the burden of proof lies with the tax authorities of the country of departure.
Am I doing something wrong now?
I even got the question from a client who had lived abroad for three years and made a lot of money. He returned to the UK and asked to be taxed and sanctioned. Again, absolutely not. You just haven’t been a taxpayer in all these years (if you play the game correctly), you can’t be taxed! So when you return you start with a clean slate.