advices & solutions for day trader EU based

[tako]

As a tax resident of Luxembourg with a French passport, I have been actively involved in daily trading activities and have achieved consistent positive returns over the past six months. Based on this experience, I am now looking to establish a long-term structure that will effectively support my long term investment strategy.

My primary objectives for setting up this structure are as follows:
Ӣ Ensure a high level of privacy and discretion in my financial affairs
Ӣ Optimize my tax obligations to minimize liabilities and enhance returns
Ӣ Simplify my approach to tax and residency requirements concerning my capital market, real estate and cryptocurrency investments, emphasizing seamless onboarding and the use of EMI/banking solutions to mitigate any potential red flags.
Ӣ Remain EU resident for at least the next 5/10 years
Ӣ Abstain of US related structures if possible

I am seeking advices & solutions that offers a robust and efficient framework for managing my investments while ensuring compliance with the relevant tax laws and regulations in EU.

Last edited: Oct 16, 2024

 

[Martin Everson]

tako said:
As a tax resident of Luxembourg with a French passport
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🙁

tako said:
Remain EU resident for at least the next 5/10 years
Click to expand...

Luxembourg has exit taxation so might as well keep that in mind if you ever plan to move before realizing capital gains etc.

https://luxtoday.lu/en/knowledge/exit-tax-in-luxembourg

tako said:
I am seeking advices & solutions that offers a robust and efficient framework for managing my investments while ensuring compliance with the relevant tax laws and regulations in EU.
Click to expand...

Forget it. Just move abroad or pay the taxes owed. Luxembourg has GAAR meaning the tax man can deem any structure or setup invalid if its purpose is to reduce tax paid.


----- quote start

General anti-abuse rule (GAAR)​

The Law implementing ATAD 1 into Luxembourg domestic tax law and applicable as of tax years starting on or after 1 January 2019 contains a provision affecting GAAR. Indeed, under the new Law, Luxembourg is to adapt and modernise its existing GAAR. 'Abuse of law' criteria and general practice have been developed progressively over recent years by authors and judges.

Under the Law text, there is an abuse of law if the legal route, having been used for the main purpose or one of the main purposes of circumventing or reducing tax contrary to the object or purpose of law, is not genuine having regard to all relevant facts and circumstances.

The legal route, which may comprise more than one step or part, shall be regarded as non-genuine to the extent that it was not used for valid commercial reasons that reflect economic reality.

---- quote end

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[tako]

Martin Everson said:
🙁



Luxembourg has exit taxation so might as well keep that in mind if you ever plan to move before realizing capital gains etc.

https://luxtoday.lu/en/knowledge/exit-tax-in-luxembourg



Forget it. Just move abroad or pay the taxes owed. Luxembourg has GAAR meaning the tax man can deem any structure or setup invalid if its purpose is to reduce tax paid.


----- quote start

General anti-abuse rule (GAAR)​

The Law implementing ATAD 1 into Luxembourg domestic tax law and applicable as of tax years starting on or after 1 January 2019 contains a provision affecting GAAR. Indeed, under the new Law, Luxembourg is to adapt and modernise its existing GAAR. 'Abuse of law' criteria and general practice have been developed progressively over recent years by authors and judges.

Under the Law text, there is an abuse of law if the legal route, having been used for the main purpose or one of the main purposes of circumventing or reducing tax contrary to the object or purpose of law, is not genuine having regard to all relevant facts and circumstances.

The legal route, which may comprise more than one step or part, shall be regarded as non-genuine to the extent that it was not used for valid commercial reasons that reflect economic reality.

---- quote end
Click to expand...

Thanks for the guidance.

 

[tako]

If I understand the situation correctly, is the only option ultimately to avoid taxes by waiting, then relocating to a place like Dubai, obtaining residency, and cashing out?

I was considering establishing Company A in a investment tax-friendly location (maybe like St. Kitts) and possibly opening a subsidiary or Company B in Luxembourg or another EU country.
I could manage all my current trading profits under the EU entities and pay taxes on that (Luxembourg has a 15% tax rate, if I remember correctly).
Then, when the time comes to relocate in about ten years, I could close the EU entity and rely on Company A solely.
I would use Company A for all real estate and other investment vehicles across different locations to simplify asset management and inheritance at the company level rather than at the individual level.

Company A could be used for overall privacy security, long term asset consolidation and company B for the EU aspect and present day trading activities ? Does this approach seem flawed to you? Maybe I'm over thinking that.

Last edited: Oct 18, 2024

 

[Martin Everson]

tako said:
If I understand the situation correctly, is the only option ultimately to avoid taxes by waiting, then relocating to a place like Dubai, obtaining residency, and cashing out?
Click to expand...

No

tako said:
Does this approach seem flawed to you?
Click to expand...

Yes

tako said:
Maybe I'm over thinking that.
Click to expand...

Yes

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[JohnnyDoe]

You should liquefate yourself to slip through the gaps and prepare your escape. It can be done with some patience.
You might want to consider flat tax in Greece or Italy as a step towards your freedom. While hoping that the EU doesn't permanently closes the gates and locks you in forever.

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@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields​

 

[cuno]

I think the question about what the percentage rate of this exit tax is and how much wealth you've accumulated is becoming increasingly relevant.

How bad is it, for example, to pay 1% on 100K?

 

[Martin Everson]

Luxembourg ”” a tax haven in the center of Europe​

https://luxtoday.lu/en/knowledge/luxembourg-a-tax-haven-in-the-center-of-europe

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[tako]

JohnnyDoe said:
You should liquefate yourself to slip through the gaps and prepare your escape. It can be done with some patience.
You might want to consider flat tax in Greece or Italy as a step towards your freedom. While hoping that the EU doesn't permanently closes the gates and locks you in forever.
Click to expand...

and what type of structure will you suggest for that? Just as individual or any company type structure ?

 

[JohnnyDoe]

tako said:
and what type of structure will you suggest for that? Just as individual or any company type structure ?
Click to expand...

There are no cookie cutter solutions.

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@JohnnyDoe ”“ Your #1 Source for Guidance in Different Offshore Fields​

 

[wellington]

tako said:
As a tax resident of Luxembourg with a French passport, I have been actively involved in daily trading activities and have achieved consistent positive returns over the past six months. Based on this experience, I am now looking to establish a long-term structure that will effectively support my long term investment strategy.

My primary objectives for setting up this structure are as follows:
Ӣ Ensure a high level of privacy and discretion in my financial affairs
Ӣ Optimize my tax obligations to minimize liabilities and enhance returns
Ӣ Simplify my approach to tax and residency requirements concerning my capital market, real estate and cryptocurrency investments, emphasizing seamless onboarding and the use of EMI/banking solutions to mitigate any potential red flags.
Ӣ Remain EU resident for at least the next 5/10 years
Ӣ Abstain of US related structures if possible

I am seeking advices & solutions that offers a robust and efficient framework for managing my investments while ensuring compliance with the relevant tax laws and regulations in EU.
Click to expand...

Rising tide lifts all ships

That rising tide was liquidity injections

But liquidity injections will begin next year seeping out of the markets into refinancing off the debt

So declining tide ahead

Ergo - it may not have been your “investment strategy”

Factor that in before thinking you are the next munger

 

[tako]

wellington said:
Rising tide lifts all ships

That rising tide was liquidity injections

But liquidity injections will begin next year seeping out of the markets into refinancing off the debt

So declining tide ahead

Ergo - it may not have been your “investment strategy”

Factor that in before thinking you are the next munger
Click to expand...

Fair point. Thank for the advice.