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Yet another Digital Nomad from EU

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Everybody who‍ knows me and who had visited Romania told me I will not like it. And⁠ my girlfriend who is coming with me doesn't want to go there too.
I will⁤ try to visit it myself in the next months but I think it doesn't fit.⁣ For myself, okay, I would give it a try, but for my girlfriend, I don't⁢ want to ignore here reservations.
She likes Georgia though.

Yeah, as I said in the beginning, I'm not here︂ to safe taxes in the first place. I'm here to find a way to support︃ my future digital nomad lifestyle, to start a company, and to simplify handling authorities and︄ taxes.
 
OK that makes‌ more sense. And yes, I opened a private Bank Account there and they want like‍ 15 Euros in fees for incoming transactions from Europe. So you are right Banking Fees⁠ are also not great.
You usually can get away with using private bank accounts in⁤ Europe for a while though. Not sure if Georgia accepts that though.
 
Not sure where‌ you are from and how comfortable you are with georgian language (maybe cyrillic didnt discourage‍ you).
But if you don't know, i'd recommend to check that first
 
Look I went‌ through same process. Georgia individual entrepreneur scheme looks nice on paper. But you will be‍ personal liable, maybe not so good in IT security. You can not get the IE⁠ scheme working with an LLC or LLP. I ran this passed Georgian law firm.
 
I thought about going with an LLC IT⁤ Free Zone. But I'm not sure that does work out for me. Thank you again⁣ for your input, i really appreciate that.

For you too @FixieHartmann, thank you for your support! I reread it several times now.︀ I thought cutting ties is not enough for German authorities, I have to have a︁ new tax residency immediately because if not, they will claim taxes. There shouldn't be any︂ gap in between official tax residencies. Though if your plan is applicable and a gap︃ of some months is allowed, then I definitely prefer your plan. It sounds less stressful︄ then other plans.
 
My business does not qualify for that. If yours would it⁠ is not a bad option. With Georgia personal tax residency is based upon 183 plus⁤ days.
 
I don't understand this! Isn't TAX⁢ residency always for a full calender year. Even if you only get to Cyprus 2︀ Month before the year ends, you should be considered TAX Residence for the full year.︁

Even if they can claim you are still TAX resident for the year, they can't︂ say therefore your newly created company is German and now you have to pay an︃ exit Tax, right?
 
Well, please read https://www.oecd.org/tax/automatic-...tance/tax-residency/Germany-Tax Residency.pdf - tax residency is actually covered in the first paragraph:

Basically, you are tax resident in Germany if your habitual︇ abode / center of life is there and / or if you have a permanent︈ place to live. Which means that as soon as your center of life is not︉ Germany anymore and you don't have a place to live there and you don't spend︊ long periods of time in Germany, you cease to be tax resident.

A new tax︋ residency is helpful, but not required. However, there are a couple things to consider when︌ cutting ties, therefore you have to work with a tax consultant to make sure that︍ you do everything correctly.

Also, it is not a question about a "gap of some︎ months" but rather making sure that you don't do anything which puts you back into️ the German tax net, therefore you need the advise from a tax consultant.
 
Well, you are mixing up a couple different aspects, let's untangle it.

In Germany the tax⁣ year equals the calendar year. So if you leave during the year then you still⁢ have to file a tax declaration for that year and declare all worldwide income. However,︀ income that you received after ceasing to be a tax resident will only increase your︁ marginal tax rate but not be taxed itself.

This is a bit complicated, so here︂ a rough example.

Say your income for 2020 is 5.000€ / month and you left︃ Germany July 1st. You will have to file taxes for 2020 and you will have︄ to declare 60.000€ in income. The 30.000€ that you earned in the second half of︅ the year will not be taxed in Germany, however the percentage that you pay in︆ tax on the 30.000€ from the first half of the year is calculated based on︇ your total salary of 60.000€.

Basically, normally for 30.000€ income you would pay about 14%︈ income tax, but because your total income is considered you now pay 25% of the︉ 30.000€, so 7.500€.

Concerning getting a second tax residency.

If you move to another country︊ where you would also become tax resident in 2020 (e.g. Cyprus from your example), then︋ you would for 2020 actually be tax resident in two countries and would need to︌ consult the double taxation treaty to see how this situation is handled and who gets︍ to tax your income.

Concerning the exit tax.

Exit taxation for entrepreneurs provides a good︎ overview of the German exit tax and if it applies to your situation.

To your️ specific question - no, when you leave Germany (even during the tax year) and then‌ set up a new company afterwards then this new company will generally not be covered‍ by the exit tax.

(I am just a random guy on the internet, not a⁠ tax advisor. These are rough examples. Please discuss your situation with a tax consultant to⁤ make sure that you are fully compliant.)
 
it's the way to do it.
I believe there⁤ are no problems other then securing your self living there?
 
In order for Romania to work out, you need to have tax residency somewhere else‌ right? (to avoid their 25% social security 10% health insurance and upt o 10% income‍ tax)
But that country to be one that does not have CFC rules in place⁠ for permanent establishment right?
just trying to understand because i am in a similar situation,⁤ EU person wanting to go to georgia but realized my ideia does not work (US⁣ LLC+ Georgia tax resident)
 
It's the opposite. You need to⁢ get RO tax residency so that other EU countries won't have questions for you. You︀ don't need to pay anything that you mentioned above since you are going to get︁ money through dividends (5% tax paid by company ).
So after initial setup, you only︂ pay: rent (300e+), accounting( mine is 45e/month), 3% revenue tax and 5% dividend tax. If︃ you invest personally or through the company then there is also 10% Capital gains tax.︄ After all that it's still a bargain if you compare RO to other EU countries.︅ Best part is that there is no 6 months bulls**t residence requirement.

The only reason︆ to pay salary/social/health insurance is to hire yourself for a minimum wage. If you have︇ an employee(you), your revenue tax drops from 3 to 1% 🙂

I actually decided to stay︈ in my country while keeping Romanian one. So I'll pay 3% revenue to RO, then︉ around 17% to my own country as corporate tax. But after 5-10 years I will︊ retire, move to Romania, take all the money out and move again somewhere warm and︋ nice. So basically it will be 20% corporate, 10% Capital gains and 5% dividend at︌ the end. Which is way better than just using LLC in my country ( 20%︍ corporate, 20-30 dividend, 30-35 capita gains ).
 
Have a look at mauritius or zanzibar which should open soon its 0% tax residency‌ with 0 days mininmum stay. Mauritius is 90 days
 
Can you provide some more information or a source? My hunch is that many EU countries‍ won’t accept a tax residency in a country with zero days minimum stay..
 
Why do you⁤ recommend Romania, Bulgaria or Cyprus for incorporation if he wants to spend a substantial time⁣ in Germany? Wouldn't that give Germany an opportunity to claim permanent establishment of effective place⁢ of management of the company? How can he avoid being appropriated by Germany?
 
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