Oh and I thought Norway is the dream country everyone aspires to be, everyone is basically a millionaire thanks to the national oil pension fund, right?
Or maybe I'm missing the other stuff like 45% tax burden, publicly available tax records, social justice warriors in Barnevernet, and all sorts of other weird things. The only good thing is probably not being member of the EU and not using the euro.
Seems to be a trend now, in the past it was a few billionaires here and there fleeing - like the shipping magnate Fredriksen renouncing Norwegian citizenship and becoming Cypriot. Now it is even middle class and various companies. You notice that in the US as well - Joe Rogan, Elon Musk, Oracle - all of them fleeing California to Texas.
In some jurisdictions, there's even reverse burden of proof for
tax evasion or money laundering, so the tax man can for example just ask them to provide proof that they earn as much as they do and compare it to their lifestyle. If the evidence doesn't prove innocence, guilt is presumed.
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This is not an "wow, it's even reverse" situation. This is a standard situation in 90%+ of countries I imagine. In criminal proceedings presumption of innocence should apply (unless you're North Korea). In civil and administrative proceedings presumption of guilt applies.
The reason I am asking is because it seems impossible to measure the risk since on one hand some people will say that you'll get caught one day or another, and on the other hand I have personally witnessed people conceding income from tax authorities in developed European countries (Germany, France) and get away with it (some people doing it for 7-10years). I am not talking big money here but rather low 6 figure incomes and I am just curious to see if you guys had any tangible feedback on this topic.
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Anyways the question of the OP goes down to the actual enforceability of a law. There are intellectual property rights but how will they be enforced when I download a Netflix series via Bittorrent? There is a law that I can't transfer 10k abroad without declaring, how will that be enforced when I take crypto with me? There are absurd laws related to Covid-19 right now, from wearing face masks in forests to shutting down restaurants, how long will countries try to enforce this before people start operating speakeasies just like in the 1920s?
It is the same with taxes - noone, literally noone pays taxes e.g. in Greece and Italy if they have even the slightest opportunity not to do so. Extremely easy if you worked in tourism on an island (now of course you got hit with covid), very easy if you're a digital nomad, still easy if you're a corporation that can hire a big-4 consultant to find a good structure for you. Not possible if you're a state employee or even just a regular employee in a corporation.
I am wondering whether banks automatically report your statements at the end of the year, and if those statements don't match with your tax returns you'll automatically be in trouble OR if it takes an actual team of physical tax representatives to randomly check for you to get busted.
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Not all transactions / incoming transfers qualify as income. If the "tax representatives" (I have doubts if that is the correct term lol...) had to go after every person with high turnover on the account, they would go crazy and be ineffective. There is a higher chance they will be triggered by your ex-wife, envious neighbour or some shady activity associated with you.
I am asking because I have always wondered if tax authorities automatically check your tax statements (manually or automatically) or if they'll randomly check your statements.
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The goal, at least for now, is not to check everyone's income and all their accounts and all transfers to the last cent. The goal of the heavily taxed countries is to keep the system running and people compliant and scared as much as possible. That is why the tax office is actually MORE likely to go after moms dropshipping stuff on local eBay without licence and without paying taxes - rather than going after a digital nomad with a higher turnover.
Someone following the flag theory is a much more difficult target - even with stuff like spying and CRS. At the very least live in country other than your citizenship, have company in country other than where you live - then add additional stuff like good banking, good company structure, perhaps second citizenship if that helps you. Be two steps ahead - then there will be thousands of much easier targets than you. And as the saying goes -
you don't need to be faster than the lion, you just need to be faster than the other zebra.
