Digital nomad tax

[GrumpyMess]

If I become non resident in my home country will I have any tax obligations in the future?
For example I have cancelled my residency and I became a digital nomad. Which address have I to give to the banks? Does it has to be from a country which can issue me a tax residency certificate ? can it be a rented for 1 month apartment in UAE ?
If later after some years I will get a residency in another country can this country or a country of my citizenship claim any tax on the profits from activity when being digital nomad?

 

[negon]

Usually if you move out of your country in person and you apply for tax residency in a new country then you have to pay tax there, whatever you have left and take back to your original home country will be tax free. So it has been for me and others I know and within the EU.

 

[GrumpyMess]

negon said:
Usually if you move out of your country in person and you apply for tax residency in a new country then you have to pay tax there, whatever you have left and take back to your original home country will be tax free. So it has been for me and others I know and within the EU.
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In case when I get a tax residency certificate elsewhere yes. The question is when I am not a tax resident anywhere.

 

[fshore]

Keep your previous address on file with the banks.
Banks normally don't ask for tax residency certificate.

 

[negon]

GrumpyMess said:
In case when I get a tax residency certificate elsewhere yes. The question is when I am not a tax resident anywhere.
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So you will have to pay tax where you do now. This depends very much on where you live, it can be different. Best would be to consult a tax lawyer.

 

[GrumpyMess]

negon said:
So you will have to pay tax where you do now.
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Why? The law allows me not to pay any tax if I am non resident here. That's what the tax layer say also. But it's a theoretical thought, no one can me give a practical case.

 

[JohnLocke]

GrumpyMess said:
Why? The law allows me not to pay any tax if I am non resident here. That's what the tax layer say also. But it's a theoretical thought, no one can me give a practical case.
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What country is it where you live?

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[KJK]

GrumpyMess said:
In case when I get a tax residency certificate elsewhere yes. The question is when I am not a tax resident anywhere.
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I have a similar question - you become a digital nomad, you become non-resident in your home country.
And you cannot prove you are staying ANYWHERE (for let's say over 6 months per year). How does that work then?
Even if you get an official residence permit somewhere and you're not staying anywhere, it sounds like a gray area...

I assume it depends on your home country?

 

[altair77]

Wich is your home country???
In all cases, you can stay out of a nation no more 6 months....
I am a very corious how to be a digital nomad. 🙂 🙂 🙂

 

[GrumpyMess]

Admin said:
What country is it where you live?
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Eastern Europe outside of EU. I think all countries which do not have a "centre of vital interests" rule act the same way.

 

[Nyep]

You will want to obtain (tax) residency at a country that has territorial tax, and not perform any work while you're there. There are many options. A popular one is Panama (friendly nations visa path). Once you have an established residency that you actively maintain (requires a short visit every few years, AFAIR) you can safely use it whenever you are asked for your (tax) residency, and prove it with the appropriate docs.

 

[KJK]

Nyep said:
You will want to obtain (tax) residency at a country that has territorial tax, and not perform any work while you're there. There are many options. A popular one is Panama (friendly nations visa path). Once you have an established residency that you actively maintain (requires a short visit every few years, AFAIR) you can safely use it whenever you are asked for your (tax) residency, and prove it with the appropriate docs.
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Yes, I know all this. However can someone demand me to prove that I'm actually living in let's say Panama and that I'm truly staying there for 6+ months in a year? The docs are one thing but reality may be another.

 

[GrumpyMess]

Nyep said:
You will want to obtain (tax) residency at a country that has territorial tax, and not perform any work while you're there. There are many options. A popular one is Panama (friendly nations visa path). Once you have an established residency that you actively maintain (requires a short visit every few years, AFAIR) you can safely use it whenever you are asked for your (tax) residency, and prove it with the appropriate docs.
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Why I have to obtain a tax residency somewhere especially if my current home country doesn't have a DTT with that country? There are very few countries in a world which issue tax residency certificates if you are living there for a less than 183 days. Isn't a simple, not a tax residency enough?

 

[Nyep]

KJK said:
However can someone demand me to prove that I'm actually living in let's say Panama and that I'm truly staying there for 6+ months in a year?
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GrumpyMess said:
Why I have to obtain a tax residency somewhere especially if my current home country doesn't have a DTT with that country?
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You want a tax residency so when you are asked "where do you pay taxes?"or "what is your residence?" you will have good, thought-out answers backed up with documents.

Who will ask? A few examples:

Your home country. If you can't prove that you were a tax resident somewhere else, your home country may decide to argue that you were in fact a tax resident there the whole time you were gone. It may not be clear cut and end up in court, but that's not a desirable outcome anyway. This is, for the most part (but not always), only a problem if you have any significant assets to lose in your home country or if you ever plan to live there again.

Banks. You will need to provide documents showing where you reside. This has consequences such as where CRS reports go, tax exemptions, etc.

Brokers. Again, you will need to prove your residence is where you say it is. This has consequences such as dividend tax withholding rate, trading regulations applying to specific countries, CRS again, etc.

The list goes on. Tread carefully.

 

[jackfrost]

Nyep said:
You want a tax residency so when you are asked "where do you pay taxes?"or "what is your residence?" you will have good, thought-out answers backed up with documents.

Who will ask? A few examples:

Your home country. If you can't prove that you were a tax resident somewhere else, your home country may decide to argue that you were in fact a tax resident there the whole time you were gone. It may not be clear cut and end up in court, but that's not a desirable outcome anyway. This is, for the most part (but not always), only a problem if you have any significant assets to lose in your home country or if you ever plan to live there again.

Banks. You will need to provide documents showing where you reside. This has consequences such as where CRS reports go, tax exemptions, etc.

Brokers. Again, you will need to prove your residence is where you say it is. This has consequences such as dividend tax withholding rate, trading regulations applying to specific countries, CRS again, etc.

The list goes on. Tread carefully.
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Exactly this. Dont get fooled by all the nomad bs talk, simply move around now and then, enjoy sun blah blah. Not how easy it will work out in real life.

You want a (tax) residency, proper tax certificates etc.

 

[JohnLocke]

KJK said:
Yes, I know all this. However can someone demand me to prove that I'm actually living in let's say Panama and that I'm truly staying there for 6+ months in a year? The docs are one thing but reality may be another.
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They could ask you for hundred of things to provide in order to proof that you either have stayed in Panama or not.

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[GrumpyMess]

Nyep said:
You want a tax residency so when you are asked "where do you pay taxes?"or "what is your residence?" you will have good, thought-out answers backed up with documents.
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It's great to have the all required documents, but I don't see any options to get them without actually residing there. For example UAE. It's enough to be there twice a year to be a resident, but it's required to stay for 183 days to get a tax residence certificate. Is the first option enough to sleep safe?

Or let's consider Cyprus. As non dom the requirement is only 60 days, which is far more acceptable. Can I use my Belize corp for work and transfer dividends tax free? In some sources such scheme is recognized as working, in some not.

I don't see any reliable options to get these documents without actually residing in a 3rd word shithole country like Guatemala

 

[KJK]

GrumpyMess said:
For example UAE. It's enough to be there twice a year to be a resident, but it's required to stay for 183 days to get a tax residence certificate. Is the first option enough to sleep safe?
Or let's consider Cyprus. As non dom the requirement is only 60 days, which is far more acceptable. Can I use my Belize corp for work and transfer dividends tax free? In some sources such scheme is recognized as working, in some not.
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Exactly, I think unless you are staying there, you are not a tax resident - they will not confirm it to you (or anyone else). At the same time, you left your home country. That means you cannot prove you are a (tax) resident anywhere.
And in the end it probably depends on your country whether they like it or not, some countries can be very strict about this - I know for sure Finland will not like it!

So if you don't want to stay in Cyprus (which seems rather dull even for just 2 months) or some other island, what can you do? It seems even more difficult for UAE because that's not an island and also not part of the Schengen zone.

 

[negon]

KJK said:
So if you don't want to stay in Cyprus (which seems rather dull even for just 2 months) or some other island, what can you do? It seems even more difficult for UAE because that's not an island and also not part of the Schengen zone.
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Why wouldyou not be able to give up your residency where ever it is now, move to Dubai, stay there for some time and even move to another country. You don't pay tax in Dubai! Cyprus is not bad for 2 - 3 months if you have money 🙂

 

[GrumpyMess]

KJK said:
So if you don't want to stay in Cyprus (which seems rather dull even for just 2 months) or some other island, what can you do? It seems even more difficult for UAE because that's not an island and also not part of the Schengen zone.
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2 months in a Cyprus is not a problem for me and it would be a perfect solution if it allows to manage a Belize corp tax free. But Cyprus is not a 0% tax zone at all. Anyway I have to consult a tax advisor to see if this case is possible.

negon said:
move to Dubai, stay there for some time
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Living in a Sharia law country where even Skype is forbidden is not for everyone