Move to UAE, wait 6 months and cash out tax free, is it that simple?
- Thread starter PinkCat
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If the UK then yes if you have no contacts that bring you under UK tax
But there's the issue with remitting the funds back and not being taxed on also.
For the EU you need to be more clear on the state specifically.
I'm not an expert, but if you are planning on keeping all the funds you cash out within UAE and you will be transacting only in local currency it might work. Some people have already done exactly that. And of course the bigger the amount the more problematic it becomes.
well i have some family in the country, the real estate is mostly on a foreign owned company, so not sure what qualifies as ties.
I'm not employed or ever have been in my home country, also no money are ever going to touch the home country, but won't stay entirely in the UAE either (Swiss, US etc)
I'm not employed or ever have been in my home country, also no money are ever going to touch the home country, but won't stay entirely in the UAE either (Swiss, US etc)
That's where you will start encountering problems. Cashing crypto won't be a problem, but moving cash out of the country certainly will.
No, not even UK.
The question isn't "Can I move to UAE and pay no income tax on new income?"
The question is "Can I move to UAE, declare undeclared income, pay no tax in UAE, and would my home country have no claim on the money?"
The difference is important. OP has committed tax evasion for the last 10 years. That doesn't go away simply by moving to UAE and becoming tax resident there.
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This is the probably the answer to your question.
Is it tax evasion if he kept his entire investment in crypto for that time? I thought you have tax liability only when you cash out to fiat
Depends on the jurisdiction. If he had an obligation to report crypto assets while being a tax resident elsewhere, but failed to do so then it could be considered a crime.
I think you're overlooking the "accumulated" part of the original question. In other threads, he's also mentioned how he earned crypto through various jobs/businesses. We're not just talking about acquiring crypto and now realizing profits.
Undeclared income is undeclared income. Doesn't really matter what form the income takes. If you could get away paying income tax simply by getting paid in something other than money, I bet a lot of people would be happy to be paid groceries, clothes, rent, cars, electronics, insurances, travels, and so on.
However, even if it were just crypto as an investment, there is still a risk of a crime having been committed. Undeclared assets are undeclared assets. Making a false/incomplete tax return isn't as severe as tax evasion, but it's still a crime.
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This is the probably the answer to your question.
If you add these points, it's possible:
- De-register from your home country
- No permanent home in your home country, no properties
- No substantial business interests in your home country
- No gym membership, mobile subscription, magazine subscriptions in home country
- No wife and kids in home country
- Spend at most 2-3 months/year in your home country
- Make sure to spend at least 183 days in your new country of residence, and have a rental contract/buy property
- Have documentation ready, flights, CC-statements, utility bills.
However, if you intend to use these funds in EU in the future, it's advisable to opt for an EU country for residency and cashing out the crypto, Cyprus for example.
It depends on the particular jurisdiction (EU is not uniform in this) but generally yes.
Again, it depends on the particular jurisdiction. Interpretation of crypto assets is not uniform across the EU.
Unfortunately, it is not, in my deep opinion. See @Sols reply
@PinkCat, general advice: speak with a good tax attorney in the relevant EU country (or eventually, share the country name here). Any particular/detailed opinion you can read here now can be invalid.
Last edited: Apr 2, 2024
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I am just a simple countryman. Anything I say is only a personal opinion, not a certified advice 🙂
If you think it makes sense, you can like it; if opposite, please, tell me, why I am wrong...
No, that's usually when he moves out of the country of residence... at least with 1st world countries.
So you're saying there's no income tax as long as you're not paid in fiat? Would the tax authority agree with that? Every time I have employed someone, it's been clear that even payment in kind is taxable. Just a matter of what the threshold is and how for example expenses are handled. But paying someone or a company in crypto isn't a legal way to be excluded from tax.
If you get paid 10,000 EUR/month in bitcoin, you have 10,000 EUR/month worth of income to declare and pay tax on. When you sell the bitcoin, that may or may not be taxable (again).
Our guy here has (probably) been committing tax evasion for 10 years. Moving to UAE isn't going to undo that.
Not saying anything will happen, especially if he keeps a low profile, and doesn't move back EU/Romania anytime soon. But tax evasion is still tax evasion. Look at the details of this question. It's income over a period of time and he ends it by asking if his former home country in the EU will have "legal claim on any tax". The answer to that is a resounding most likely yes.
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This is the probably the answer to your question.
So let's say I put 10k usd into crypto (legal taxed income from employment or business) and after some years its worth 100 k usd, do I have to pay tax yearly on the capital gain or only at the moment I cashout? When it comes to stocks its paid when you cashout usually so I thought the same is with crypto. Of course you can't use it to pay somebody
I understand that we need to be law-abiding and pay our taxes, so there's a lot of talk here about how to pay tax on one's crypto.
But isn't the reality that if I've had some crypto, let's say Bitcoin, in a wallet for 10 years, bought 10 years ago and just left there, no one knows about it, lying on a cold wallet. Then I can take that stick with me, make some transaction with another company where I pay with these cryptos and get a product and an invoice for it? - Don't try to tell me they check that in the UAE or other countries when you've just moved there, stay for 6 months, move on to the next country, stay there for 6 months and move again.
I believe the confusion is total, and I would dare to do it with up to 2 million euros, but if it were much more, then I would look for another solution.
But isn't the reality that if I've had some crypto, let's say Bitcoin, in a wallet for 10 years, bought 10 years ago and just left there, no one knows about it, lying on a cold wallet. Then I can take that stick with me, make some transaction with another company where I pay with these cryptos and get a product and an invoice for it? - Don't try to tell me they check that in the UAE or other countries when you've just moved there, stay for 6 months, move on to the next country, stay there for 6 months and move again.
I believe the confusion is total, and I would dare to do it with up to 2 million euros, but if it were much more, then I would look for another solution.
In Germany this would be tax free!
Just to be clear: that is not what the original question is. OP is not asking about tax on cashing out an investment. OP has for 10 years been running a business and doing work, for which he was paid in crypto. That income was never declared and no tax paid on it. So now OP has a bunch of crypto that he wants to cash out. My whole point is that moving to UAE isn't technically going to undo 10 years of tax evasion.
Your question is the age old "What tax do I pay on cashing out a crypto investment?", to which the answer is it depends on where you live and what local law says there. Some tax it, some don't. Those who tax it may tax it differently depending on whether they consider crypto a currency, an asset, a security, or something else.
TBH, I think the reason for the confusion in this thread is that is a lot of people haven't fully understood the question.
People are answering the question: "Is there tax on selling crypto in UAE?"
When the question actually was: "I have earned income for 10 years, not declared or paid tax on it, moved to UAE recently, and now plan to cash out the income. Does my former home country have legal grounds to prosecute me for tax evasion?" Which, yes, it does. It probably won't happen, though, if OP plays his cards correctly.
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This is the probably the answer to your question.
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