- How do the tax authorities proceed to tax you? Of course, each country has specific rules, but broadly speaking, it always comes down to the same thing.
Where’s your goldfish?
Most countries use as a starting point to tax you in a certain country where you really live. All kinds of elements are mentioned here. Usually, it must be a combination of factors that indicate that the balance is tilted to country A or B.
A few examples:
- your family still lives in A
- your partner lives in A
- You’re still a member of the sports club there
- You’re still going to the dentist
- you’ve got another company
- you still have an important stock portfolio there
- You’ve got another car there
- you call with a local phone number
….
In other words, if you still officially live in country A, if you still have an extensive social life there, if your partner lives there… then it is hard to say that you do NOT live there.
Tip.
If you have the feeling for yourself that you do not live there anymore, then you will usually not live there for the tax authorities either!
Attention!
Ask our advice and not that of Mr Google, because as said, one country is stricter than the other. For example, the well-known tennis player Boris Becker was hit hard by the German tax authorities years ago. Why He declared to live in Monaco, but when he was in Germany he often slept with his aunt, who always kept the guest room free for her favorite nephew. This was enough for the German tax authorities to tax Boris Becker in Germany.
Track that calendar?
Not for all, but for a number of countries such as the UK, the number of days is very important. For example, if you spend 91 days in the UK during a fiscal year (i.e. from 6 April to 5 April of the following year), you are automatically a taxpayer in the UK.
In other countries, such as the Netherlands or France, the number of days you stay in the UK is an indication of where your real and therefore tax life takes place.
Tip.
So in most countries (but there are exceptions) you play it safe by staying there for less than 183 days or six months.
Annoying countries.
Some countries are very strict, such as Norway and Sweden. In Norway (if you have lived there for less than 10 years before you leave) you will have to prove even stricter:
- that you have your fiscal residence in another country;
- in Norway, for example, you did not spend more than 61 days in a fiscal year;
- and that your wife, partner or child still have their tax residence in Norway.
In Finland, too, one remains a taxpayer for another three years after leaving the country, unless you can prove that you no longer have ‘essential ties’ with Finland.
In the Scandinavian countries, you will, therefore, be punished less if you cut someone up and dissolve them in sulfuric acid than if you try to avoid taxes.
In Spain, if you move to a ‘tax haven’, you will be liable for tax for another four years. Maybe you will have to go through another country first…
Ideal for a digital nomad!
If you’re a real digital nomad, then you can escape the taxes in your home country. If you are a young dynamic man or woman who wants to conquer the world and you work from your laptop, then the world is at your feet and tax paradise beckons. Bye-bye taxman!
Make your checklist like the perfect murder.
Don’t make a mistake! One mistake can mean the difference between hallucinating tax freedom and being squeezed like a lemon to the last drop.
Lifetime for Americans.
The U.S. and some countries like Eritrea tax you based on your nationality. So an American citizen has to file an American tax return all his life even if he surrenders full-time to Buddhism on a tree branch in the Himalayas. Whether the American in question pays taxes is a different matter and will depend on double tax treaties, among other things. Some countries make it even tougher, such as Eritrea, where every Eritrean living abroad has to pay 2% of his income in taxes.
Attention!
Green card holders are also in the same boat and can still be US taxpayers until 10 years after the end of their green card status. Americans can only escape this straitjacket by renouncing their nationality, and this is not always easy either.
ASK US FOR A TAILOR – MADE ADVICE ! CONTACT US AT INFO@DEHOON-DHP.COM !!
