Do short term tax residency certificates work at all?

[PinkCat]

If you get tax residency like the 2 weeks one in Barbados or 90 days one of UAE, but still stay 6+ months in your home country, will that tax residency help like AT ALL?
Or as long as you are 6+ month in your home country they will demand taxes no matter what obscure tax residency certificates you show them?

 

[Sols]

No.

 

[Martin Everson]

NO

 

[JackAlabama]

If you get tax residency like the 2 weeks one in Barbados or 90 days one of UAE, but still stay 6+ months in your home country, will that tax residency help like AT ALL?
Or as long as you are 6+ month in your home country they will demand taxes no matter what obscure tax residency certificates you show them?

No. Not even if the ex Dubai youtuber now mentions Barbados

 

[daniels27]

The certificates are most likely useless anyways. Even if you stay 183 days, the other country may still investigate you.

 

[Dandyline]

Many countries doesn't even care about the certificate at all, and isn't even requesting it.

 

[daniels27]

Many countries doesn't even care about the certificate at all, and isn't even requesting it.

Most of the time they only care when you want to have withholding tax waived (dividends, royalties, interest). And I think in any case when they care, they don't rely on the certificate but perform additional checks themselves.

 

[JackAlabama]

Most of the time they only care when you want to have withholding tax waived (dividends, royalties, interest). And I think in any case when they care, they don't rely on the certificate but perform additional checks themselves.

this is it.

 

[Martin Everson]

Just for the avoidance of doubt a foreign tax residency certificate has no meaning in your home country. If you meet the requirements for being considered tax resident in your home country then a foreign tax residency certificate has no meaning in helping to avoid tax in home country. Only a DTA between your country and the foreign country may help in such a situation.

I must also add you can be considered tax resident in more than one country at the same time and some people are. Even the CRS forms allow for specifying multiple tax residencies. Tax offices have their own rules related to days present, center of activity etc and a foreign piece of paper showing tax residency in another country does not prevent you from still being considered tax resident in your home country while also being tax resident in the foreign country.

 

[PinkCat]

so what exactly i should do to not be considered tax resident in my EU country?

Everybody says severe ties, but nobody explains what ties means exactly and how they interpret it.
I've never been employed in my home country and own minimal stuff under my name. Just mortgaged apartment.
Most assets are held through a company that is owned by a foreign company that might be owned by me.

Also with EU borders open, how do they know exactly how much time i've spent here?

 

[Martin Everson]

so what exactly i should do to not be considered tax resident in my EU country?

Leave formally.

Everybody says severe ties, but nobody explains what ties means exactly and how they interpret it.
I've never been employed in my home country and own minimal stuff under my name. Just mortgaged apartment.
Most assets are held through a company that is owned by a foreign company that might be owned by me.

Each country has different definition of ties. You need to examine your countries requirements for being considered a non-resident and follow them.

Also with EU borders open, how do they know exactly how much time i've spent here?

Tax office can look at your phone signal and see when you were roaming and when you were resident. They can look at your digital transactions to see where they took place or where money was being spent, doctors visits etc to name a few. You would need to go off grid and live on cash. You maybe be able to fly below the radar but at some point you may slip up.

 

[PinkCat]

are there any precedents where they did infact examine mobile phone data?

p.s. note to self, transfer your mobile phone contract to someone else.

 

[Martin Everson]

are there any precedents where they did infact examine mobile phone data?

When the tax auditor subpoenas your cell phone records

John needed to prove that he was NOT in New York City for more than 183 days in 2014 to 2016. Auditors subpoenaed his cell phone records to prove him wrong

blog.monaeo.com

Also UK has many ways to find you and Germany and Netherlands and other countries in Europe have similar tools and methods that go beyond phone records.

12 Ways HMRC Can Tell If You Are A Tax Cheat! | Kinsella Tax

We investigate 12 ways that HMRC can use to check if you have been involved in Tax Evasion and are a tax cheat! Read & Check - Call us on 0800 471 4546!

www.kinsellatax.co.uk

However phone records in general (calls, location data, phone number or IMEI from handset) are one of the biggest crime fighting tools governments have. They can track you as in the case of knowing everyone that attended a protest. Or in case of Sarah Everard killing in UK where they were able to place the phone signal at the scene of the crime and convict the police officer of killing that poor woman.

 

[Sols]

are there any precedents where they did infact examine mobile phone data?

Yes. It doesn't always happen in every case but there is very little a tax authority can't do if they decide to pursue someone. They have enormous investigative powers.

 

[0xDEADBEEF]

Once you're on their radar, proving innocence becomes increasingly tough. I've seen them conduct extensive forensic investigations on suspects' devices, so their research isn't limited to just asking telcos for data. These are typically extreme cases, but if they think you're worth the effort, they'll go all out.

It seems like you're trying to find a quick fix to cash out and stay where you are. But that might not be legal.

If you share more about where you pay taxes, you might get better advice. But no matter where you live, if you want to use your money wisely, you need a long-term plan + legal advice. Especially since you've kept this 'secret' for so long.

 

[Konstanz]

Just for the avoidance of doubt a foreign tax residency certificate has no meaning in your home country. If you meet the requirements for being considered tax resident in your home country then a foreign tax residency certificate has no meaning in helping to avoid tax in home country. Only a DTA between your country and the foreign country may help in such a situation.

I must also add you can be considered tax resident in more than one country at the same time and some people are. Even the CRS forms allow for specifying multiple tax residencies. Tax offices have their own rules related to days present, center of activity etc and a foreign piece of paper showing tax residency in another country does not prevent you from still being considered tax resident in your home country while also being tax resident in the foreign country.

it depends on country, but having such certificate is better than not having. But it just one document of package of many other documents (flight tickets, credit card statements, rent agreement, electricity etc etc)
if you can't even produce certificate it's unrealistic to prove residence I think

 

[Martin Everson]

it depends on country, but having such certificate is better than not having. But it just one document of package of many other documents (flight tickets, credit card statements, rent agreement, electricity etc etc)
if you can't even produce certificate it's unrealistic to prove residence I think

If you meet the tax residency requirements of your residing country (as in case of OP) then that tax certificate is 100% worthless.

Ask Shakira who obtained Bahamas tax residency and Spanish tax man laughed at her as they nailed her to the cross naked.

Shakira Reaches Last-Minute Agreement In Spanish Tax Evasion Case

Shakira has reached an agreement to settle a years-long legal dispute related to accusations that she had evaded taxes for the years 2012, 2013 and 2014.

www.forbes.com

---- quote start

Shakira’s residence was precisely the issue in her tax matter. Shakira had previously resided in the tax-friendly Bahamas. According to Spanish authorities, she continued to claim Bahamian residency for tax purposes until 2015, when she changed her official residency to Spain. Because of the difference in residence for tax purposes, the authorities had accused Shakira of failing to pay more than 14.5 million euros ($15.8 million U.S.) in income taxes between 2012 and 2014.

Spanish tax authorities, however, claim that she was a resident of Spain, not the Bahamas, from 2011 through 2014. In response, Shakira reportedly paid more than 20 million euros ($21,891,300 U.S.) to settle part of her alleged tax debt while not admitting that she owed tax.

--- quote end

 

[Forester]

Each country has different definition of ties. You need to examine your countries requirements for being considered a non-resident and follow them.

If you share more about where you pay taxes, you might get better advice.

Exactly.
As said in another thread – Move to UAE, wait 6 months and cash out tax free, is it that simple?: Unless you share your current tax residence, this discussion is near to worthless. (I understand that you might not want to do it publicly, so you can go to the Mentor Group for this discussion.) I repeat: maybe a surprise for someone but tax rules differ a lot across the EU!
Just an example, e.g owning a mortgaged apartment is pretty enough to be considered tax resident in some countries and quite unimportant in other ones.

 

[Bura]

so what exactly i should do to not be considered tax resident in my EU country?

Everybody says severe ties, but nobody explains what ties means exactly and how they interpret it.
I've never been employed in my home country and own minimal stuff under my name. Just mortgaged apartment.
Most assets are held through a company that is owned by a foreign company that might be owned by me.

Also with EU borders open, how do they know exactly how much time i've spent here?

I want to add a little to the recommendations mentioned above. Please note that this is just a small addition, and not the main recommendations for proving that you are not a tax resident in your EU country.

You write that you have an apartment with a mortgage. Are you registered in it or in any other housing in your EU country? If yes, then you need to register your departure from your place of residence in your EU country. But be careful, it might affect your mortgage agreement.

In the country where you plan to have tax residency instead of your EU country, you should go to the consulate of your EU country and register there. Get a certificate from the consulate that you have registered as a citizen of your EU country permanent living in this country. Register at your place of permanent residence in your new country. Usually, this happens in a special unit of the local police or migration service. Very likely that the consulate asks this local registration of your local residence for registering you as the citizen of your EU country permanent living in this country.

If a change in your tax residence will result in a change in the returns you file with the tax authority or a change in tax rates, I recommend that you submit a formal question to the tax authority through your account on the tax authority's website or about how it works in your country. You can formulate the question in the format of a notification of changing your tax residence.

 

[Forester]

I want to add a little to the recommendations mentioned above. Please note that this is just a small addition, and not the main recommendations for proving that you are not a tax resident in your EU country.

You write that you have an apartment with a mortgage. Are you registered in it or in any other housing in your EU country? If yes, then you need to register your departure from your place of residence in your EU country. But be careful, it might affect your mortgage agreement.

In the country where you plan to have tax residency instead of your EU country, you should go to the consulate of your EU country and register there. Get a certificate from the consulate that you have registered as a citizen of your EU country permanent living in this country. Register at your place of permanent residence in your new country. Usually, this happens in a special unit of the local police or migration service. Very likely that the consulate asks this local registration of your local residence for registering you as the citizen of your EU country permanent living in this country.

If a change in your tax residence will result in a change in the returns you file with the tax authority or a change in tax rates, I recommend that you submit a formal question to the tax authority through your account on the tax authority's website or about how it works in your country. You can formulate the question in the format of a notification of changing your tax residence.

Yes, good points, valid almost universally, I think.