The strategy of reallocating to a no-to-low tax for years

[cryptodefi]

I love OCT forum, you are great people! But I've been reading all the posts on this forum and still haven't found a go-to solution...

Ok, you need to move to a low-to-zero country, which today is very limited, and usually, the countries are very expensive and limited and boring life.

Let's say I have a few million in crypto, and never declared tax, because for the government, I'm just a young poor guy. I have no kids, no ties to my home country, etc.

My home country isn't the US, Europe, or China. Here I can sign an exit document and be free of taxes while outside.

1. If I move for a few years to a country that has 0% tax, can I withdraw crypto to fiat over the years?
1.1 Will the bank require a source of income even if it is 0% tax? Additionally, will there be any kind of tax return?
1.2 How can I prove SoF since I had many thousands of transactions over 10 years, in dozens if not hundreds of wallets that I anymore don't have access to?
1.3 What else they would require me to prove?

To be translucent, I'm a tad frightened to have my bank account frozen. I have only experience in crypto and banking is a bit scary to me

2. Coming back to my home country, should I pay tax since my money has already been made during the years I stayed outside?
2.1 Will they require a "tax return" from the country I lived in and the source of funds?
2.2. What else they would require me to prove?

I'm also scared to come back and have my money frozen.

3. Does it make sense to incorporate a company in the investing sector in another low-to-zero tax country for a tax optimization?
3.1 What are the potential strategies I can follow?

 

[Martin Everson]

cryptodefi said:
1. If I move for a few years to a country that has 0% tax, can I withdraw crypto to fiat over the years?
Click to expand...

Yes

cryptodefi said:
1.1 Will the bank require a source of income even if it is 0% tax?
Click to expand...

Yes

cryptodefi said:
Additionally, will there be any kind of tax return?
Click to expand...

Depends on country.

cryptodefi said:
1.2 How can I prove SoF since I had many thousands of transactions over 10 years, in dozens if not hundreds of wallets that I anymore don't have access to?
Click to expand...

You will show where the investment money originally came from. You then need to explain your situation and let bank decide.

cryptodefi said:
1.3 What else they would require me to prove?
Click to expand...

Depends on the individual banks KYC.

cryptodefi said:
2. Coming back to my home country, should I pay tax since my money has already been made during the years I stayed outside?
Click to expand...

Depends on rules of home country.

cryptodefi said:
2.1 Will they require a "tax return" from the country I lived in and the source of funds?
Click to expand...

Depends on rules of home country.

cryptodefi said:
3. Does it make sense to incorporate a company in the investing sector in another low-to-zero tax country for a tax optimization?
Click to expand...

No.

cryptodefi said:
3.1 What are the potential strategies I can follow?
Click to expand...

Tax amnesty if available. If you lose 50% of stack through penalties and avoid jail or prosecution that is still a good result if you made a few millions as you say.

Pretty much any other action you take will involve money laundering as the funds came from a tax evasion crime in your home country. So moving to a country where you can cash out you have to keep this in mind.

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

 

[cryptodefi]

Tax amnesty if available. If you lose 50% of stack through penalties and avoid jail or prosecution that is still a good result if you made a few millions as you say.

Pretty much any other action you take will involve money laundering as the funds came from a tax evasion crime in your home country. So moving to a country where you can cash out you have to keep this in mind.
Click to expand...

Why tax evasion? What I just did is to buy and sell cryptos over the years, even before the government knew what crypto was.

Also, I'm happy to move to a low-to-zero tax country, start a business, make money from this starting point, pay the tax or have the file return, and just return to my home country after a few years when I have most of the income proven.

My country is Brazil. I don't think they are that smart such as the US and Europe.

I'm sure there are strategies to be done. Just cannot figure it out.

cryptodefi said:
3. Does it make sense to incorporate a company in the investing sector in another low-to-zero tax country for a tax optimization?
Click to expand...

No.
Click to expand...

In this example I'm living to a low tax jurisdiction and would be paying my taxes (or the high expense living cost) to collect tax return, and SoF

 

[Martin Everson]

cryptodefi said:
What I just did is to buy and sell cryptos over the years, even before the government knew what crypto was.
Click to expand...

No problem then explain this to the Brazilian taxman or a tax advisor. You need to find out if you actually owe any tax or whether you are worrying about nothing. If you owe tax then actions you take after that is tax evasion.

cryptodefi said:
Why tax evasion?
Click to expand...

Because you said the below......

cryptodefi said:
Let's say I have a few million in crypto, and never declared tax, because for the government, I'm just a young poor guy.
Click to expand...

As I said above are you saying you don't owe any tax for your crypto in Brazil in that case?

https://coinledger.io/blog/brazil-crypto-tax

Bottom line is that if you know you owe taxes but just want to skip town to a low tax country to cash out then just say that? A lot people just go to Dubai due to easy straight forward residency requirements and even ability to buy real estate with very few questions asked and put their crypto directly into hard assets globally avoiding fiat. Then they cash out within 12 months or so. However you look at it this is money laundering if the source of funds is from tax evasion i.e proceeds of a crime. But you make your choices and I don't judge.

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

 

[random000]

Martin Everson said:
Bottom line is that if you know you owe taxes but just want to skip town to a low tax country to cash out then just say that? A lot people just go to Dubai due to easy straight forward residency requirements and even ability to buy real estate with very few questions asked and put their crypto directly into hard assets globally avoiding fiat. Then they cash out within 12 months or so. However you look at it this is money laundering if the source of funds is from tax evasion i.e proceeds of a crime. But you make your choices and I don't judge.
Click to expand...

If someone legally moved to no tax country, plan to spend couple of years there and has 100% legit source of funds from trading/investing into crypto, how can that be considered tax evasion?

 

[jafo]

Martin Everson said:
No problem then explain this to the Brazilian taxman or a tax advisor. You need to find out if you actually owe any tax or whether you are worrying about nothing. If you owe tax then actions you take after that is tax evasion.




Because you said the below......



As I said above are you saying you don't owe any tax for your crypto in Brazil in that case?

https://coinledger.io/blog/brazil-crypto-tax

Bottom line is that if you know you owe taxes but just want to skip town to a low tax country to cash out then just say that? A lot people just go to Dubai due to easy straight forward residency requirements and even ability to buy real estate with very few questions asked and put their crypto directly into hard assets globally avoiding fiat. Then they cash out within 12 months or so. However you look at it this is money laundering if the source of funds is from tax evasion i.e proceeds of a crime. But you make your choices and I don't judge.
Click to expand...

If I were you, @cryptodefi , I would wait and read the final Supreme Court decision in Moore vs. United States. Here is and short descriptionm: With the Moore vs. United States Case, the Supreme Court Could Unleash Chaos on Our Tax System

Here is an excerpt:

If I were you, I would start by reading that whole docket sheet and then peruse SCOTUS' decision, memorize it, and act accordingly. 😉

I think the Moores are going to win. Their logic is solid as a rock but SCOTUS has made horrible mistakes in the past (think e.g. Dred Scott v. Sanford (1857)), and this won't be the last if they side with their other "gang members", the IRS. stupi#21

NOTE: The link above I posted is the arguments by Steve Wamhoff who is an UNPRODUCTIVE PRO-TAX PARASITE. ca#"!

Here is Petitioner's brief: https://www.supremecourt.gov/DocketPDF/22/22-800/289622/20231115114606125_22-800 Reply Brief.pdf

Here is the SCOTUS oral argument: https://www.c-span.org/video/?531893-1/moore-v-united-states-oral-argument


Good luck!

 

[Gediminas]

cryptodefi said:
I love OCT forum, you are great people! But I've been reading all the posts on this forum and still haven't found a go-to solution...

Ok, you need to move to a low-to-zero country, which today is very limited, and usually, the countries are very expensive and limited and boring life.

Let's say I have a few million in crypto, and never declared tax, because for the government, I'm just a young poor guy. I have no kids, no ties to my home country, etc.

My home country isn't the US, Europe, or China. Here I can sign an exit document and be free of taxes while outside.

1. If I move for a few years to a country that has 0% tax, can I withdraw crypto to fiat over the years?
1.1 Will the bank require a source of income even if it is 0% tax? Additionally, will there be any kind of tax return?
1.2 How can I prove SoF since I had many thousands of transactions over 10 years, in dozens if not hundreds of wallets that I anymore don't have access to?
1.3 What else they would require me to prove?

To be translucent, I'm a tad frightened to have my bank account frozen. I have only experience in crypto and banking is a bit scary to me

2. Coming back to my home country, should I pay tax since my money has already been made during the years I stayed outside?
2.1 Will they require a "tax return" from the country I lived in and the source of funds?
2.2. What else they would require me to prove?

I'm also scared to come back and have my money frozen.

3. Does it make sense to incorporate a company in the investing sector in another low-to-zero tax country for a tax optimization?
3.1 What are the potential strategies I can follow?
Click to expand...

Hey,

Proof of how you made your wealth (source of funds ”“ SOW) has almost nothing to do with taxation.

You will receive such questions from payment institutions (banks, EMI, exchanges) because AML laws require that they understand the source of your assets. They are interested in whether your wealth is derived from legal sources or not, and only in rare cases they might ask about taxation.

Taxation of crypto is not an easy topic, if asked you can always challenge that unrealized gains should not be taxable, etc.

As regards the source of the fund's documents ”“ I advise you to start working on this now and to prepare a letter with attachments explaining the history and how you came to your current financial status.

Banks prefer that it is prepared chronologically, attaching trade, exchange files, etc. We did such exercises many times before. It is better to prepare now than later when asked by the bank.

As regards tax reporting ”“ if you reside in Dubai or another country that does not have personal tax reporting, you can obtain a letter from an audit or other professional firm that examined your income and states that your income for the year xxxx is EUR xxxx and that you don't need to report them.

Such signed letters will serve as proof that you received income in that year and that you were diligent.

Since capital gains are earned while you are a tax resident of a high-tax country, cashing out the first or second year you arrive in Dubai or another zero-tax country is possible, but has some theoretical risks.

You can be 100% safe only after the statute of limitations period in your home country. On the other hand, no one wants to wait for such long so there are many structuring ways related to this.

I hope this helps. 😉

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https://locked.money - Your Crypto Management Company, Ready in Days ”“ Trade, Invoice, $1,200/Year!

 

[lelaos]

The best option in my opinion is to move to a country with zero tax and open a business that will accept cryptocurrency payments, this way you can easily explain the origin of the funds and avoid backward tax claims.

 

[jafo]

lelaos said:
The best option in my opinion is to move to a country with zero tax and open a business that will accept cryptocurrency payments, this way you can easily explain the origin of the funds and avoid backward tax claims.
Click to expand...

Solid as a ROCK!

 

[Martin Everson]

random000 said:
If someone legally moved to no tax country, plan to spend couple of years there and has 100% legit source of funds from trading/investing into crypto, how can that be considered tax evasion?
Click to expand...

Did you not read what I wrote? Please read it again as your well off with the current OP position.

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

 

[jafo]

random000 said:
If someone legally moved to no tax country, plan to spend couple of years there and has 100% legit source of funds from trading/investing into crypto, how can that be considered tax evasion?
Click to expand...

Depending on the dates on the blockchain 😉

 

[random000]

Martin Everson said:
Did you not read what I wrote? Please read it again as your well off with the current OP position.
Click to expand...

Thanks for advice. I realise I wont bother with crypto to fiat/bank since I refuse to pay parasites (goverment) nothing. They would use my tax money for their lifestyle instead helping people. Crypto payments work fine as well p2p crypto<=>cash.

Offtopic question

Does UAE, Thailand or Portugal report back to citizenship country if you buy real estates with crypto?

 

[jafo]

random000 said:
I refuse to pay parasites (goverment) nothing. They would use my tax money for their lifestyle instead helping people.
Click to expand...

Welcome to the club! 😉 This is actually a very smart mindset. 😎

Here is what I have been applying for a while now...not easy, but doable:
Good luck!

PS. Definitely find a zero-tax (or low-tax) country and do it from there, but just make sure you can offramp without issues or, better yet, pay with crypto and let the "locals" offramp 😉

 

[Martin Everson]

random000 said:
Does UAE, Thailand or Portugal report back to citizenship country if you buy real estates with crypto?
Click to expand...

We know that a data leak in UAE let data get into hands of foreign tax agencies.

https://www.offshorecorptalk.com/threads/dubai-uncovered-dataleak-191-000-names-leaked.37331/
I would not bother with EU countries like Portugal but Thailand and anything outside UK, EEA, Canada, New Zealand US and Australia would be my choice.

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

 

[jafo]

Martin Everson said:
We know that a data leak in UAE let data get into hands of foreign tax agencies.
Click to expand...

Martin Everson said:
I would not bother with EU countries like Portugal but Thailand and anything outside UK, EEA, Canada, New Zealand US and Australia would be my choice.
Click to expand...

I wonder why the US (and some others) never have data leaks from Wyoming, Delaware, Nevada, etc. 🙄

 

[random000]

Martin Everson said:
We know that a data leak in UAE let data get into hands of foreign tax agencies.

https://www.offshorecorptalk.com/threads/dubai-uncovered-dataleak-191-000-names-leaked.37331/
I would not bother with EU countries like Portugal but Thailand and anything outside UK, EEA, Canada, New Zealand US and Australia would be my choice.
Click to expand...

Thanks for that, I missed that post. My paranoid mind also tells me there is possibility that agents in UAE working for real estate rental companies could also send info to home country security agencies/tax agencies?

 

[jafo]

random000 said:
agents in UAE working for real estate rental companies could also send info to home country security agencies/tax agencies?
Click to expand...

Why not?

Many high-tax (and maybe medium-tax?) countries pay rewards or just outright purchase (potential) tax information about their own citizens. Too many examples to list here: Germany Weighs Purchase of Swiss Bank Data by Informant (Published 2010)

Akin to the Narcotics Reward Program: Narcotics Rewards Program - United States Department of State

PS. BTW, once your name falls on that NRP, you are so f*cked stupi#21 whether you are involved or not. Even if you are NEVER investigated, you are so f*cked! 😳 Hence why I don't disrespect people online. hi%#

 

[cryptodefi]

Wow, solid answers! Thank you very much everyone, I'll answer each one

You need to find out if you actually owe any tax or whether you are worrying about nothing. If you owe tax then actions you take after that is tax evasion.
Click to expand...

No, I don't owe any taxes because I never declared and haven't sent much money to bank accounts.

I spent a couple of years traveling offshore. But is there any way to have a definitive answer?

Bottom line is that if you know you owe taxes but just want to skip town to a low tax country to cash out then just say that?
Click to expand...

I don't know if I owe taxes to be honest because it's in crypto unrealized gains.

When I got rugged by -6 figures loss no government would pay me a fraction back lol But who cares what I think about this BS!?

Proof of how you made your wealth (source of funds ”“ SOW) has almost nothing to do with taxation.

You will receive such questions from payment institutions (banks, EMI, exchanges) because AML laws require that they understand the source of your assets. They are interested in whether your wealth is derived from legal sources or not, and only in rare cases they might ask about taxation.
Click to expand...

That's interesting. they don't care if I paid taxes in my home country? I just need to prove to them that the source of funds is legit and would be enough.

Also I have a shell company in a zero-tax company without annual report that I use to sign SAFT/SAFE contracts for investment. Does it prove SoF/SoW?

The problem with moving to a zero-tax jurisdiction is that they have a very complicated process, and you need to be able to invest 200k - 400k or prove you are wealthy. And I thought it can be problematic if they analyse my case, demand where I paid my taxes, and report me to my home country.

Now if I tell them that I've been traveling and can prove I've been traveling (and prove that)? ps. I know the perpetual traveler is a BS but in this case if requested tax report

As regards tax reporting ”“ if you reside in Dubai or another country that does not have personal tax reporting, you can obtain a letter from an audit or other professional firm that examined your income and states that your income for the year xxxx is EUR xxxx and that you don't need to report them.

Such signed letters will serve as proof that you received income in that year and that you were diligent.
Click to expand...

Is it purchased? I mean is there any grey area about it? Or is it like dealing with a government that wants to screw you up?

You can be 100% safe only after the statute of limitations period in your home country. On the other hand, no one wants to wait for such long so there are many structuring ways related to this.
Click to expand...

Well, it says it's 5 years, it's been over 5 years I've been traveling (and that I collected my first 6figs. And I can easily stay over 5 years outside...)

The best option in my opinion is to move to a country with zero tax and open a business that will accept cryptocurrency payments, this way you can easily explain the origin of the funds and avoid backward tax claims.
Click to expand...

That's exactly what I had in mind.
Move to a zero-tax country, build a business in crypto in another zero-tax country. And pay me a high salary through a contract.

 

[cryptodefi]

We still have many important questions to discuss. I'm still at 0.

Let's use this thread for good. I'm sure there are a lot of people at the same situation.

 

[random000]

cryptodefi said:
No, I don't owe any taxes because I never declared and haven't sent much money to bank accounts.

I don't know if I owe taxes to be honest because it's in crypto unrealized gains.

When I got rugged by -6 figures loss no government would pay me a fraction back lol But who cares what I think about this BS!?
Click to expand...

This makes sense to me as well, but I am not sure if it makes sense in term of goverments "laws"

I mean most goverments have started "regulating" crypto recently after we had that pump 2-3 years ago to 65k and they still have no idea what they are doing.

And crypto is around for 10+ years. Retroactively trying to tax something which was not even regulated properly at that time is theft imo.