Best 1st world countries with low to zero income tax?
- Thread starter banafinfodafuggiano
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If you are a resident of Malta and spend most of your time there, then there's a higher chance it's perceived as locally sourced income (depending on the substance).
Note that corporate tax and personal income tax are separate matters.
You can also set up your business structure in Malta but reside somewhere else where this income is not taxed.
From a tax perspective, branches of overseas companies are only taxable in︀ Malta on income arising in Malta and on income arising outside Malta but received in︁ Malta.
Note that corporate tax and personal income tax are separate matters.
You can also set up your business structure in Malta but reside somewhere else where this income is not taxed.
From a tax perspective, branches of overseas companies are only taxable in︀ Malta on income arising in Malta and on income arising outside Malta but received in︁ Malta.
Classic "troubled soul", countless accounts looking for impossible solutions for likely fictitious problems.
Estonia and Latvia sound ok.
This is︁ interesting,
what is foreign sourced income though?
Is ecommerce from sales from Canada foreign income︂ if I manage all the companies from within San Marino?
This is︁ interesting,
what is foreign sourced income though?
Is ecommerce from sales from Canada foreign income︂ if I manage all the companies from within San Marino?
If OP receives only dividends, why not consider Slovakia, which has a withholding tax (WHT) rate of 7%? If dividends are received without any active involvement from OP in Slovakia, they may be exempt from Corporate Income Tax (CIT).
Hello @Don, in the scenario you️ provided, could you clarify the specific reasons for recommending Kosovo or Bulgaria over Slovakia?
Hello @Don, in the scenario you️ provided, could you clarify the specific reasons for recommending Kosovo or Bulgaria over Slovakia?
I see some Canadians are happy in EU-Bulgaria, which now likely partially also becomes EU-Schengen zone in March at least for air and sea travel (aka Air Schengen). Fixed rate to Euro, could get Euro in 2025. 10% income tax, 5% dividend tax through company setup. As freelancer 6% income tax for authors or royalties, 4% for farmers. Possibility to receive dividend pre-payments throughout the year and live on them. Major cities like Sofia and Plovdiv are decent, Varna on the black sea has the climate and little snow. Neighbor Romania also has a lot to offer. With steady income relatively easy to obtain residence︀ visa for Canadians.
Just my 2 cents re: Bulgaria/Kosovo/Slovakia. Local languages there are a disaster for an average Canadian and % of locals speaking decent English (or French 😉 ) is low. In addition, Bulgarians use non-Latin (Cyrillic) alphabet and (geo-)political situation in Kosovo is IMO also of concern.
I might be a little biased, but hear me out:
If he keeps the Canadian business setup its probably best to move residency to a jurisdiction which has a (non-shitty) DTT with Canada to avoid double tax residency.
I would︀ then choose the one with lowest withholding taxes and narrow it down to the jurisdiction︁ that applies the lowest total taxes on dividends.
https://taxsummaries.pwc.com/canada/corporate/withholding-taxes
Amongst those I would choose the︂ one which has great tax planning options, flexible to qualify as tax resident and easy︃ residence options. I also can't blame OP for his personal preferences.
Slovakia might be great︄ for passive income, but not so good for new business setup (21% CIT + 7%︅ WHT).
As Estonian resident he would pay 5% WHT on dividends only in Canada and︆ 0% in Estonia (in Cyprus/Malta 15%).
Estonia can also provide opportunities for future business setups︇ with much lower overall tax rate (e.g., 0%-5%).
A rather unique benefit of Estonia is︈ that it doesn't have in its laws management and control test for determining corporate tax︉ residence, so its less likely that Estonia would go after a foreign corporate structure.
Tax residency doesn't require any physical stay offering maximum flexibility.
If he keeps the Canadian business setup its probably best to move residency to a jurisdiction which has a (non-shitty) DTT with Canada to avoid double tax residency.
I would︀ then choose the one with lowest withholding taxes and narrow it down to the jurisdiction︁ that applies the lowest total taxes on dividends.
https://taxsummaries.pwc.com/canada/corporate/withholding-taxes
Amongst those I would choose the︂ one which has great tax planning options, flexible to qualify as tax resident and easy︃ residence options. I also can't blame OP for his personal preferences.
Slovakia might be great︄ for passive income, but not so good for new business setup (21% CIT + 7%︅ WHT).
As Estonian resident he would pay 5% WHT on dividends only in Canada and︆ 0% in Estonia (in Cyprus/Malta 15%).
Estonia can also provide opportunities for future business setups︇ with much lower overall tax rate (e.g., 0%-5%).
A rather unique benefit of Estonia is︈ that it doesn't have in its laws management and control test for determining corporate tax︉ residence, so its less likely that Estonia would go after a foreign corporate structure.
Tax residency doesn't require any physical stay offering maximum flexibility.
As a non-resident of Canada, you pay tax on income you receive from sources in︂ Canada. The type of tax you pay and the requirement to file an income︃ tax return depend on the type of income you receive. Generally, Canadian income received by︄ a non-resident is subject to Part XIII tax or Part I tax.
https://www.canada.ca/en/revenue-ag...anada-non-residents/non-residents-canada.html
I am︅ not sure if this applies to you. Is your e-commerce connected to Canada?
https://www.canada.ca/en/revenue-ag...anada-non-residents/non-residents-canada.html
I am︅ not sure if this applies to you. Is your e-commerce connected to Canada?
Perhaps this doesn't apply to his︇ situation, and I could be mistaken, but based on my understanding, if someone has an︈ LLC partnership in Delaware and receives dividends, they would only incur a 7% tax rate︉ in Slovakia. In Bulgaria, the tax rate would be 10%, and Bulgaria is in the︊ non-Schengen area.
Can’t go wrong with Thailand
Bangkok / Phuket is akin to first world for most things - and to be blunt, the areas it isn’t work to your advantage.
Then ask yourself - what is first world - as the UK is 12-18 hrs for A&E these days, the US banking system is broken, the European Union is rife with mafias and Islamic terrorism, they are all broken systems breaking down.
From East Africa through to the pacific the monsoon region specifically in the Indian Ocean is at peak productivity by age demographics which will result in an economic boom and a “great wash of opportunities and wealth creation” will result in infrastructure and private enterprises coming into build these︀ countries out to akin to what the west had and threw away.
Thailand doesn’t have︁ interest in taxing overseas companies / operations that are completely outside of Thailand - I︂ had that discussion around the new tax set up with the revenue department myself -︃ so as long as you are just a director and are not operating a company︄ on the ground they are not interested.
Any income you make if remitted would be︅ taxed through - with all the deductions you can make it doesn’t work out too︆ bad.
Savings are still tax free if from before 2023 tax year when remitted.
Bangkok / Phuket is akin to first world for most things - and to be blunt, the areas it isn’t work to your advantage.
Then ask yourself - what is first world - as the UK is 12-18 hrs for A&E these days, the US banking system is broken, the European Union is rife with mafias and Islamic terrorism, they are all broken systems breaking down.
From East Africa through to the pacific the monsoon region specifically in the Indian Ocean is at peak productivity by age demographics which will result in an economic boom and a “great wash of opportunities and wealth creation” will result in infrastructure and private enterprises coming into build these︀ countries out to akin to what the west had and threw away.
Thailand doesn’t have︁ interest in taxing overseas companies / operations that are completely outside of Thailand - I︂ had that discussion around the new tax set up with the revenue department myself -︃ so as long as you are just a director and are not operating a company︄ on the ground they are not interested.
Any income you make if remitted would be︅ taxed through - with all the deductions you can make it doesn’t work out too︆ bad.
Savings are still tax free if from before 2023 tax year when remitted.
Thailand if you like Asia, Spain if you like Med. With 1.2 mil NW your tax liability will be very limited anyways and with 4% withdrawal you will get around 50k per year - that a very comfortable living in Thailand even in expat populated areas and a decent life in south Spain. I would say Thailand will give you more run for your money so it all goes down the lifestyle you are after. Maybe do a year in Thailand, see if you like it and if not - you can always come back to Spain.
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