0% plan and coming back from tax haven after 10 years

Konstanz · Jan 30, 2024

Cloudbanck said:
Look at how western countries define tax residency. Passport country/ies (mostly) don't matter, and with CFC rules where you own businesses doesn't matter either. What matters is center of vital interest / time spent / ties, and often how long you lived in the western country before leaving.

Yes, and it's getting more difficult to exit high tax countries. The most smart thing is to exit and never register to high country again.

Mr Gus · Jan 30, 2024

zzzzzz said:
Let's say you want legally 0% personal tax for the next 10 years but with one foot still in your home country.
Citizenship and current residency is in EU.

Next step: you deregister and cut residential ties, and establish new residential ties and home in tax haven.

Questions:
1. Can you stay legally 182 days in your country of citizenship every year? Like a tourist, no bank account there, no residential ties, paying with cards and cash, living in a house owned by relatives ...etc.?

2. How important is to stay X number of days in tax haven? UAE has 90 days minimum if you rent/own home and want to get TRC. But do you really need TRC if you're already deregistered in your country of citizenship?
What if you plan your year like this:
UAE 94 days
EU country of citizenship 182 days (<183 days limit)
other EU country 89 days (<90 day limit)?

3. Let's say after 10 years of investing and accumulation, your personal brokerage account in USA grows to decent size and you also have all the documents (trading account history, SOF ...etc.).

What can you expect from taxman in your EU country of citizenship when you register back home and next year sees your brokerage account size via CRS?

When does taxman ask for proofs of your past years (card transactions, flight tickets, utility bills, TRC,...etc.)? From what I have read, main targets are people who are still secretly living in their home country or their family is still there (and taxman somehow sees that) or didn't deregister but want to use DTA for the past year to have tax non-resident status.
What are your experiences? @Sols

Yes this is possible under a couple of conditions.

You will have to move to a country that your home country has a tax treaty with, if that is the case you can get treaty protection under the following conditions.

1. You have a permanent home in your new country of residence and not in your home country (staying with relatives is possible if you don't have permanent access to that home and don't have your "own room" in that home.
2. Stay 183 days or more in your new country of residence.

If you fulfill these conditions you have treaty protection making it impossible for the taxman to consider you tax resident in your home country, it doesn't mean they won't try but you will have treaty protection which overrides local laws.

A TRC is the most useless piece of paper on this planet, it doesn't give you any sort of protection.

freegeek · Jan 30, 2024

Mr Gus said:
Yes this is possible under a couple of conditions.

You will have to move to a country that your home country has a tax treaty with, if that is the case you can get treaty protection under the following conditions.

1. You have a permanent home in your new country of residence and not in your home country (staying with relatives is possible if you don't have permanent access to that home and don't have your "own room" in that home.
2. Stay 183 days or more in your new country of residence.

If you fulfill these conditions you have treaty protection making it impossible for the taxman to consider you tax resident in your home country, it doesn't mean they won't try but you will have treaty protection which overrides local laws.

A TRC is the most useless piece of paper on this planet, it doesn't give you any sort of protection.

the tax man disagrees with you

Mr Gus · Jan 30, 2024

freegeek said:
the tax man disagrees with you

Who cares you have treaty protection.

Don · Jan 30, 2024

Cloudbanck said:
Look at how western countries define tax residency. Passport country/ies (mostly) don't matter, and with CFC rules where you own businesses doesn't matter either. What matters is center of vital interest / time spent / ties, and often how long you lived in the western country before leaving.

You are right. "Permanent home available to him" is the first test that tends to fail.. then you are left with CVI (centre of vital interest). If you spend most of your time in one country, your CVI is quite clearly there...unless there is strong evidence proving otherwise

Mr Gus said:
Yes this is possible under a couple of conditions.

You will have to move to a country that your home country has a tax treaty with, if that is the case you can get treaty protection under the following conditions.

1. You have a permanent home in your new country of residence and not in your home country (staying with relatives is possible if you don't have permanent access to that home and don't have your "own room" in that home.
2. Stay 183 days or more in your new country of residence.

If you fulfill these conditions you have treaty protection making it impossible for the taxman to consider you tax resident in your home country, it doesn't mean they won't try but you will have treaty protection which overrides local laws.

Staying 183 days or more in a new country supports the claim that the CVI is there.
183 days stay is actually more important for employment purposes. If you stayed in one country for 183 days, then at least you can be sure your employment income will not be taxed in another country where you stayed for less time.

Mr Gus said:
A TRC is the most useless piece of paper on this planet, it doesn't give you any sort of protection.

At the end of the day, tax authorities can also deviate from the law and act opportunistically, claiming your tax residence. Then it's up to you to prove them otherwise.
Two countries can also interpret the tax treaty differently. In this case, MAP (mutual agreement procedure) helps, which you, as a taxpayer, need to request, e.g., to claim for adjustment.

The MAP is the mechanism that Contracting States use to resolve any disputes or difficulties that arise in the course of implementing and applying the treaty.

Mr Gus said:
Who cares you have treaty protection.

There is no such thing really.
Countries can interpret DTT differently, both claiming your tax residence based on a DTT.

Then you have MAP to sort it out, which can further end up in arbitration.

freegeek · Jan 30, 2024

Mr Gus said:
Who cares you have treaty protection.

yeah it does not work like that. If a judge declares that your center of life and/or vital interests are still in your home country and rules in favour of the tax man then not a single tax treaty will protect you. There is a very thread going on in this sub of a German dude who moved to Switzerland and the German tax man want their piece of the pie, I can assure that there is not a single tax treaty that exists between Switzerland and Germany that will be of any help when you are in this position.

Mr Gus · Jan 30, 2024

freegeek said:
yeah it does not work like that. If a judge declares that your center of life and/or vital interests are still in your home country and rules in favour of the tax man then not a single tax treaty will protect you. There is a very thread going on in this sub of a German dude who moved to Switzerland and the German tax man want their piece of the pie, I can assure that there is not a single tax treaty that exists between Switzerland and Germany that will be of any help when you are in this position.

If you have treaty protection there is nothing they can do in the end.

Like I said I am not saying they won't try taxing you but if you have treaty protection you will win the case in the end.

Don said:
You are right. "Permanent home available to him" is the first test that tends to fail.. then you are left with CVI (centre of vital interest). If you spend most of your time in one country, your CVI is quite clearly there...unless there is strong evidence proving otherwise

Staying 183 days or more in a new country supports the claim that the CVI is there.
183 days stay is actually more important for employment purposes. If you stayed in one country for 183 days, then at least you can be sure your employment income will not be taxed in another country where you stayed for less time.

At the end of the day, tax authorities can also deviate from the law and act opportunistically, claiming your tax residence. Then it's up to you to prove them otherwise.
Two countries can also interpret the tax treaty differently. In this case, MAP (mutual agreement procedure) helps, which you, as a taxpayer, need to request, e.g., to claim for adjustment.

The MAP is the mechanism that Contracting States use to resolve any disputes or difficulties that arise in the course of implementing and applying the treaty.

There is no such thing really.
Countries can interpret DTT differently, both claiming your tax residence based on a DTT.

Then you have MAP to sort it out, which can further end up in arbitration.

If you have a permanent home in your new country and not in your home country and stay 183 days in your new country of residence you have treaty protection.

The 183 is not up for discussion, that is something you can prove very easily, you either stayed there 183 days or not. The permanent home is also pretty straight forward.

If those two apply to you you don't even have to worry about cvi, nationality etc. Your home country can claim all they want but it won't stand in court.

Like I said before I am not saying they won't try to tax you, but if you have treaty protection it always overrides local law.

freegeek · Jan 30, 2024

Mr Gus said:
If you have treaty protection there is nothing they can do in the end.

Like I said I am not saying they won't try taxing you but if you have treaty protection you will win the case in the end.

If you have a permanent home in your new country and not in your home country and stay 183 days in your new country of residence you have treaty protection.

The 183 is not up for discussion, that is something you can prove very easily, you either stayed there 183 days or not. The permanent home is also pretty straight forward.

If those two apply to you you don't even have to worry about cvi, nationality etc. Your home country can claim all they want but it won't stand in court.

Like I said before I am not saying they won't try to tax you, but if you have treaty protection it always overrides local law.

This is simply not true! Do you think that UAE will come to your defense with the "treat" if a European court slaps your for tax evasion. The high tax countries don't give a f*****k about the 183 days rule. vital interests and center of life are the most important criteria. The link I provided showed hundreds of cases of Belgian people who were renting expensive homes in freaking Monaco and still got hit by the Belgian tax man because this was considered a fake tax residence because their real life was in Belgium even if they were in Belgium less then 183 days. I can guarantee you that in any of the high tax countries where they use these criteria, you will be dragged into court and you will lose 99% of the time if they find out that you are staying 182 days in your high tax home country while you have tax residence in Dubai.

Freeman01 · Jan 30, 2024

zzzzzz said:
Questions:
1. Can you stay legally 182 days in your country of citizenship every year? Like a tourist, no bank account there, no residential ties, paying with cards and cash, living in a house owned by relatives ...etc.?

2. How important is to stay X number of days in tax haven? UAE has 90 days minimum if you rent/own home and want to get TRC. But do you really need TRC if you're already deregistered in your country of citizenship?
What if you plan your year like this:
UAE 94 days
EU country of citizenship 182 days (<183 days limit)
other EU country 89 days (<90 day limit)?

3. Let's say after 10 years of investing and accumulation, your personal brokerage account in USA grows to decent size and you also have all the documents (trading account history, SOF ...etc.).

What can you expect from taxman in your EU country of citizenship when you register back home and next year sees your brokerage account size via CRS?

I think this is a bad idea.
1. Yes you can do it. In theory. But then you wouldn't have to care about 182 days. You could just stay as long as you like. Because if they catch you, they might argue that you stayed much longer. I did a post, where even where I stayed and documented less than 100 days a year - It may mean trouble. Depends on the country. Also by the way, I do not think it is a good way to live. Staying in a home of relatives and so on, works only on short time.

2. Depends on your country. But I would say if you stay 182 days in Germany and 94 days in Dubai, Germany would try to tax you. I'm not an expert, but sounds like you would like to live in europe and pay taxes in UAE. Not sure if this is a good idea, especially since, they would have the information when you crossed the border and so on.

3. Returning after 10 years. Actually I would say you should be fine. Like after 10 years. Who cares. Nobody would be able to prove anything. But of course if the amounts are high, they might take a detailed look.
Again the "problem" with your plan is: you do not know what happens in 10 years. Maybe they change to rules or change the procedure how things are checked. Like they might just ask, where have you been the last 3 years and then you might get into some trouble.

Don · Jan 30, 2024

freegeek said:
This is simply not true! Do you think that UAE will come to your defense with the "treat" if a European court slaps your for tax evasion. The high tax countries don't give a f*****k about the 183 days rule. vital interests and center of life are the most important criteria. The link I provided showed hundreds of cases of Belgian people who were renting expensive homes in freaking Monaco and still got hit by the Belgian tax man because this was considered a fake tax residence because their real life was in Belgium even if they were in Belgium less then 183 days. I can guarantee you that in any of the high tax countries where they use these criteria, you will be dragged into court and you will lose 99% of the time if they find out that you are staying 182 days in your high tax home country while you have tax residence in Dubai.

One thing to consider is the incentive the other State would have to protect your tax residence. Ask yourself, would the jurisdiction get additional tax revenue if they could treat you as its tax resident.

Why would anyone invest resources to gain nothing? Making you happy is probably not sufficient motivation

Mr Gus · Jan 30, 2024

Don said:
One thing to consider is the incentive the other State would have to protect your tax residence. Ask yourself, would the jurisdiction get additional tax revenue if they could treat you as its tax resident.

Why would anyone invest resources to gain nothing? Making you happy is probably not sufficient motivation

It has nothing to do with the other state.

freegeek said:
This is simply not true! Do you think that UAE will come to your defense with the "treat" if a European court slaps your for tax evasion. The high tax countries don't give a f*****k about the 183 days rule. vital interests and center of life are the most important criteria. The link I provided showed hundreds of cases of Belgian people who were renting expensive homes in freaking Monaco and still got hit by the Belgian tax man because this was considered a fake tax residence because their real life was in Belgium even if they were in Belgium less then 183 days. I can guarantee you that in any of the high tax countries where they use these criteria, you will be dragged into court and you will lose 99% of the time if they find out that you are staying 182 days in your high tax home country while you have tax residence in Dubai.

It simply is true, it has nothing to do with the UAE. I am not talking about a "183 day rule". I am talking about treaty protection. You won't lose in court if you have treaty protection.

There is no tax treaty between Belgium and Monaco, in this case the Belgium tax authorities can claim anything they want, because you will not have treaty protection. Even if people actually resided in Monaco the whole year you could still lose in court if they could find some ties.

Don · Jan 30, 2024

Mr Gus said:
It has nothing to do with the other state.

It simply is true, it has nothing to do with the UAE. I am not talking about a "183 day rule". I am talking about treaty protection. You won't lose in court if you have treaty protection.

There is no tax treaty between Belgium and Monaco, in this case the Belgium tax authorities can claim anything they want, because you will not have treaty protection. Even if people actually resided in Monaco the whole year you could still lose in court if they could find some ties.

It's true that if you do not have a double tax treaty in place, there is pretty much nothing you can do about dual tax residence.

jafo · Jan 30, 2024

freegeek said:
This is simply not true! Do you think that UAE will come to your defense with the "treat" if a European court slaps your for tax evasion. The high tax countries don't give a f*****k about the 183 days rule. vital interests and center of life are the most important criteria. The link I provided showed hundreds of cases of Belgian people who were renting expensive homes in freaking Monaco and still got hit by the Belgian tax man because this was considered a fake tax residence because their real life was in Belgium even if they were in Belgium less then 183 days. I can guarantee you that in any of the high tax countries where they use these criteria, you will be dragged into court and you will lose 99% of the time if they find out that you are staying 182 days in your high tax home country while you have tax residence in Dubai.

This man KNOWS!

To the rest of you who think that some "paperwork" or treaty will save you, I present to you: Thomas Quick: the Swedish serial killer who never was

Just one out of thousands (if not millions) of miscarriages of justice in Europe. It's just that we are better at hiding/concealing it than our American counterparts. And also less inclined to admit we've been wrong.

Tax agencies are run by psychopaths & employ other psychopaths! Who else would do a job that consists of "forcefully stealing what doesn't belong to me and giving a portion of it to other gang members who are just like me?"

Mr Gus said:
There is no tax treaty between Belgium and Monaco, in this case the Belgium tax authorities can claim anything they want, because you will not have treaty protection. Even if people actually resided in Monaco the whole year you could still lose in court if they could find some ties.

Don said:
It's true that if you do not have a double tax treaty in place, there is pretty much nothing you can do about dual tax residence.

Wait... Assume you both are correct here for a minute...

So, "Li 百万富翁" of China, a resident and citizen of China, purchases a home in Monaco where he spends 90 days. Furthermore, he also travels to Belgium once a year, rents an Airbnb for 90 days in Brussels, and then returns to China.

Are you all telling us that the Belgian tax authority can target "Li 百万富翁" for taxes or is this "targeting" limited ONLY to (former?) Belgian "citizens/residents"?

freegeek · Jan 30, 2024

Mr Gus said:
It has nothing to do with the other state.

It simply is true, it has nothing to do with the UAE. I am not talking about a "183 day rule". I am talking about treaty protection. You won't lose in court if you have treaty protection.

There is no tax treaty between Belgium and Monaco, in this case the Belgium tax authorities can claim anything they want, because you will not have treaty protection. Even if people actually resided in Monaco the whole year you could still lose in court if they could find some ties.

Read the frigging post above you from the German guy, he has troubles and he stayed less then 100 days in Germany and there is a DTT between Switzerland and Germany. This has nothing to do with DTT and has everything to do with fiscal law and what the criteria are to be considered a tax resident. Belgium, France, Netherlands, Germany, Spain and other high tax countries don't give a f***k about the 183 day rule. In their law the main criteria are substance, center of life / vital interest. If you stay 49% of the time of the year in your home country while being a tax resident in UAE and they find out, you will lose in court and there is not a single DTT that will change that fact. Stop spreading this nonsense that the 183 day rule is the holy grail. If it was that easy, every single European freelancer working from behind a computer would be tax resident in UAE and enjoy that sweet 0% tax.

jafo said:
This man KNOWS!

To the rest of you who think that some "paperwork" or treaty will save you, I present to you: Thomas Quick: the Swedish serial killer who never was

Just one out of thousands (if not millions) of miscarriages of justice in Europe. It's just that we are better at hiding/concealing it than our American counterparts. And also less inclined to admit we've been wrong.

Tax agencies are run by psychopaths & employ other psychopaths! Who else would do a job that consists of "forcefully stealing what doesn't belong to me and giving a portion of it to other gang members who are just like me?"

Wait... Assume you both are correct here for a minute...

So, "Li 百万富翁" of China, a resident and citizen of China, purchases a home in Monaco where he spends 90 days. Furthermore, he also travels to Belgium once a year, rents an Airbnb for 90 days in Brussels, and then returns to China.

Are you all telling us that the Belgian tax authority can target "Li 百万富翁" for taxes or is this "targeting" limited ONLY to (former?) Belgian "citizens/residents"?

The nonsense you read sometimes here is mind boggling. They can close the forums, we have found the holy grail for not paying taxes, we all just get tax residence in the UAE and make sure that we don't stay more then 182 days in our high tax countries and the tax psychos will be happy

Don · Jan 30, 2024

freegeek said:
The nonsense you read sometimes here is mind boggling. They can close the forums, we have found the holy grail for not paying taxes, we all just get tax residence in the UAE and make sure that we don't stay more then 182 days in our high tax countries and the tax psychos will be happy

If only life were that easy

At the same time, I've witnessed first-hand a person living more or less full-time in the country for ~10 years straight, but because his family is abroad, he is considered a tax resident abroad due to Center of Vital interests.

Also, I know an example of a person who perpetually travelled between the UK, Monaco, and another country for 15 years straight and got away as a non-tax resident anywhere.

So, I would say this approach could work in some specific cases.

freegeek · Jan 30, 2024

Don said:
One thing to consider is the incentive the other State would have to protect your tax residence. Ask yourself, would the jurisdiction get additional tax revenue if they could treat you as its tax resident.

Why would anyone invest resources to gain nothing? Making you happy is probably not sufficient motivation

We are talking about UAE, they have zero incentive to protect you because you are not paying taxes anyway. What boggles my mind that there are still people who think having a tax residence in low tax country A even with a tax certificate of said country will protect them from claims from high tax home country B if that country decides that according to their laws you are a tax resident. I went to a highly regarded international tax advisor in Belgium and he advised me 100% NOT to do what is advised here (basically fake tax residence) unless you want to be in a world of pain. It is the first thing they investigate if you move to Monaco, UAE, ...

Don said:
If only life were that easy

At the same time, I've witnessed first-hand a person living more or less full-time in the country for ~10 years straight, but because his family is abroad, he is considered a tax resident abroad due to Center of Vital interests.

Also, I know an example of a person who perpetually travelled between the UK, Monaco, and another country for 15 years straight and got away as a non-tax resident anywhere.

So, I would say this approach could work in some specific cases.

agreed in some specific cases where you can fly under the radar. Staying 182 days in your home country close to family, friends, ... is not such a corner case. I don't get this obsession for paying zero taxes. Move to frigging Bulgaria, pay your little taxes, lay low for the first year and then travel within the EU to the places you want to be, take some precautions and nobody will care. I stayed for extended periods in Spain, Portugal, Greece hopping from Airbnb to other rental places and never got a tax letter from Spain, Portugal, Greece. There are less stressfull solutions for living a good lifestyle then having basically a fake tax residency in UAE. If you move to these countries you are painting a big bullseye on your back for the forseeable future so you better do it right or get burned.

Don · Jan 30, 2024

UAE is also very clear about not issuing a TRC based on a DTA unless you spend 6+ months in a year in UAE.

Konstanz · Jan 30, 2024

What many people do is have just UAE residence card and live in Europe (not their home country).
Actually nobody is interested in you unless you are registered in population registrar or have job
If you just spend money, you are just a tourist. However, I would not advise this for high profile persons. Who get lot of attention from their home countries etc. It just for small people.

Most people I know with UAE residence in reality live in South Europe and visit UAE just to renew visa. They usually avoid trouble because they are low key. But I would not advise this.

Mr Gus · Jan 30, 2024

freegeek said:
Read the frigging post above you from the German guy, he has troubles and he stayed less then 100 days in Germany and there is a DTT between Switzerland and Germany. This has nothing to do with DTT and has everything to do with fiscal law and what the criteria are to be considered a tax resident. Belgium, France, Netherlands, Germany, Spain and other high tax countries don't give a f***k about the 183 day rule. In their law the main criteria are substance, center of life / vital interest. If you stay 49% of the time of the year in your home country while being a tax resident in UAE and they find out, you will lose in court and there is not a single DTT that will change that fact. Stop spreading this nonsense that the 183 day rule is the holy grail. If it was that easy, every single European freelancer working from behind a computer would be tax resident in UAE and enjoy that sweet 0% tax.

The nonsense you read sometimes here is mind boggling. They can close the forums, we have found the holy grail for not paying taxes, we all just get tax residence in the UAE and make sure that we don't stay more then 182 days in our high tax countries and the tax psychos will be happy

What a childish way of admitting you are wrong, no need to get emmotional

The defenition of a forum is a place where people can discuss their ideas and opinions, you don't have to agree with everyone.

For some reason you seem to avoid responding to all my arguments? Are you just not reading it or not capable enough to understand?

Just because there is DTT doesn't mean you have treaty protection... But your whole opinion now is based on this thread from this German guy? (Who knows if he is telling the truth), because I just countered your Belgian/Monaco argument. As far as I can read the German tax authorities are only challenging him for the "swiss taxes" in the year of immigration to Switzerland, with a very big likely hood of him not having treaty protection that year since 2M was earned in GER and 1M in Swiss according to him. Why aren't they going after him for the other years he lived in Switzerland? Maybe because they see that their chances are basically zero because he has treaty protection in the following years. But just because the German tax authorities claim something it doesn't mean they are right, but since I assume he doesn't have treaty protection in the year of immigration, that year it will come down to local fiscal law.

And for some reason you keep putting words in my mouth about this "183 day rule". I completely agree with you that there isn't such a thing as a "183 day rule", please stop putting words in my mouth.

I'm not sure if you are aware but the UAE has recently introduced a 9% corporate tax, it's not "zero tax" anymore for people running an active business from the UAE. As well in the tax treaty UAE/Netherlands for example treaty benefits can only be granted to UAE CITIZENS, so as a Dutch citizen you are never able to get treaty protection anyways.

freegeek · Jan 30, 2024

Mr Gus said:
What a childish way of admitting you are wrong, no need to get emmotional The defenition of a forum is a place where people can discuss their ideas and opinions, you don't have to agree with everyone.

For some reason you seem to avoid responding to all my arguments? Are you just not reading it or not capable enough to understand?

Just because there is DTT doesn't mean you have treaty protection... But your whole opinion now is based on this thread from this German guy? (Who knows if he is telling the truth), because I just countered your Belgian/Monaco argument. As far as I can read the German tax authorities are only challenging him for the "swiss taxes" in the year of immigration to Switzerland, with a very big likely hood of him not having treaty protection that year since 2M was earned in GER and 1M in Swiss according to him. Why aren't they going after him for the other years he lived in Switzerland? Maybe because they see that their chances are basically zero because he has treaty protection in the following years. But just because the German tax authorities claim something it doesn't mean they are right, but since I assume he doesn't have treaty protection in the year of immigration, that year it will come down to local fiscal law.

And for some reason you keep putting words in my mouth about this "183 day rule". I completely agree with you that there isn't such a thing as a "183 day rule", please stop putting words in my mouth.

I'm not sure if you are aware but the UAE has recently introduced a 9% corporate tax, it's not "zero tax" anymore for people running an active business from the UAE. As well in the tax treaty UAE/Netherlands for example treaty benefits can only be granted to UAE CITIZENS, so as a Dutch citizen you are never able to get treaty protection anyways.

The OP wants UAE tax residence while living in his home country for 182 days as a "tourist", it is literally in his opening post, maybe you should stick to the subject instead of posting stuff that has zero relevance to what the OP was asking? Now you are going on ignore status, ciao ciao

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