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Living 'Tax-Free' in Europe: Flying Under the Radar on Savings Alone?

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WormCasting

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Feb 25, 2024
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#1
In the given scenario:

- You solely rely on your crypto balance for sustenance.
- All your funds are held in cryptocurrency, sufficient for your lifetime needs.
- Your intention is to lawfully cash out a portion of your crypto assets in a tax-efficient jurisdiction,
allowing you to establish a bank account with adequate funds for purchasing land in Europe.
- The acquired land will serve as the site for your future home construction.

Question with example: Assuming you hold a Latvian passport and
have never paid taxes in your home country due to being a perpetual traveler since leaving school.

Suppose you possess 900k EUR in your bank account (after partially cashing out your crypto holdings),
earmarked for the acquisition of land in Portugal or Spain to construct your residence. (Property Transfer Tax can not be avoided?)

Could Spanish tax authorities attempt to levy taxes in any form, considering that your bank account is solely utilized for land acquisition without additional income?
All personal expenses, such as food and memberships to sports clubs, are covered by your girlfriend's bank card, registered under her name.

Is it feasible to 'legally evade taxes' in Spain or Portugal under these circumstances, or might authorities perceive your ownership of land and property as dubious due to their inability to levy taxes?
 
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#2
I believe what you mean is to avoid personal tax residence in these countries, which might be possible.
Question is,why do you consider it important to directly own land on your own name? You might want to use a legal entity for holding the property.
 
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#3
My aim is to convert some of my cryptocurrency assets into cash in a country with low taxes.
Then, I'll transfer the money into a bank account, either personal or under a company name
(I haven't had a bank account for over five years).

Following this, I plan to purchase land in Spain or Portugal without earning any additional income.
For day-to-day expenses like food, activities, and memberships, my girlfriend will manage the funds through her bank account.

Essentially, I want to appear having a lifestyle similar to that of a retiree over 65 years old.
Many folks around here claim that Spain has the world's toughest tax authorities,
advising against living there. However, in my situation, I don't earn any income,
and all my daily expenses are untraceable to my identity.

I'm uncertain about the specific steps involved and I'm open to suggestions that ensure a smooth process without any complications.
I prefer to maintain a high level of anonymity throughout.
Could you provide more information about establishing a legal entity for property ownership in Spain or Portugal?
 
#4
If you hadn't been a perpetual traveller, you can just take the cash and move to Spain. As long as Spain does not tax wealth, you won't pay tax. If you invest the cash, you have to pay tax on interest, dividends and capital gains.

Please check in detail, there are places such as Switzerland which have wealth taxes and even charge people without employment social contributions based on wealth.
 
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#6
If I legally cash out my cryptocurrency in a foreign country, outside of Spain,
and have documentation proving the sale of my crypto before purchasing property in Spain,
they shouldn't tax me if the bank account is below 2 million euros, as you mentioned.

I won't have any income except for the funds in a bank account, which I'll use to buy the property.
Afterward, all expenses will be paid under other people's names.

Additionally, nobody knows about the balance in my crypto wallet.
 
#7
WormCasting said:
If I legally cash out my cryptocurrency in a foreign country, outside of Spain,
and have documentation proving the sale of my crypto before purchasing property in Spain,
they shouldn't tax me if the bank account is below 2 million euros, as you mentioned.

I won't have any income except for the funds in a bank account, which I'll use to buy the property.
Afterward, all expenses will be paid under other people's names.

Additionally, nobody knows about the balance in my crypto wallet.
Click to expand...

If you can demonstrate tax residency in the country where you have collected the cryptocurrencies, and the tax authorities of that country have approved that operation, and the money is banked in that country. Then there won't be any problem.

But I suggest that you consult the operation you want to do with both tax advisors in the country where you are going to collect your cryptocurrencies in cash, and with a tax advisor in Spain. This way you avoid any unwanted risk.

I also tell you. In Spain, as soon as you are a resident you must declare any amount that exceeds 50,000 euros that you have in cryptocurrencies, as well as any other assets that you own outside of Spain. In form 720 when you file your income tax return.

Another thing is that you don't do it and no one finds out. As if you have a million euros under your bed. But just to make it clear to you how the law works in Spain.
 
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#8
If you plan to be a resident, and buy property in Spain, you will be asked to prove the origin of that money.

When buying a home, the buyer must justify the origin of the money to avoid money laundering. To this end, since 2010, when Law 10/2010 on the prevention of money laundering was approved, it has been mandatory to sign the money laundering document when purchasing a home.
 
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#10
Something to consider, especially since you mentioned Latvian passport, in most EU countries you don't just stop being tax resident when you leave, you have to de-register your tax residency by proving you are tax resident somewhere else. Chances are, you are still considered tax resident in your home country.
 
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#12
JosephLL said:
This problem, like every 2nd post here on oct, boils down to the question: where/how do I cash out my crypto...
Click to expand...
You don't! You only pay with it!

It's like cashing your credit card (cash advance) and then using that money to pay for what you could have paid with a credit card.

I'm still baffled by people TRYING to do this.

People screaming they want to buy a house or luxury car and need the money in a bank account? Tough luck! Pay with crypto or forget about it.

But understand, when people purchase a house or luxury car in a high-tax country, "the envious gang members in gov." WILL eventually have a target to "seize/confiscate". Don't paint a bull's eye on your back. :rolleyes:

Move to a jurisdiction with NO taxes and NO BS.
 
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#13
jafo said:
You don't! You only pay with it!

It's like cashing your credit card (cash advance) and then using that money to pay for what you could have paid with a credit card.

I'm still baffled by people TRYING to do this.

People screaming they want to buy a house or luxury car and need the money in a bank account? Tough luck! Pay with crypto or forget about it.

But understand, when people purchase a house or luxury car in a high-tax country, "the envious gang members in gov." WILL eventually have a target to "seize/confiscate". Don't paint a bull's eye on your back. :rolleyes:

Move to a jurisdiction with NO taxes and NO BS.
Click to expand...
spot on.
 
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#14
jafo said:
But understand, when people purchase a house or luxury car in a high-tax country, "the envious gang members in gov." WILL eventually have a target to "seize/confiscate". Don't paint a bull's eye on your back.
Click to expand...
I would not dare to follow your plan as you have described it in your thread. You need to research which country will give you the advantages you want (or at least close to) and then structure your business and lifestyle accordingly.
 
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#15
lavel said:
I would not dare to follow your plan as you have described it in your thread. You need to research which country will give you the advantages you want (or at least close to) and then structure your business and lifestyle accordingly.
Click to expand...
You should definitely follow your OWN plan.
I'm just very risk-adverse.
If these so-called "public servants even try to seize/confiscate" anything mine, I'll escalate the situation to personal levels that +99.99% of the world's population will NOT agree with or condone. So, in order to stay on the "obedient and passive" side of the law, I avoid ANY and ALL risks. I rather perish than allow myself to be (financially) raped. It's a personal thing exclusive to me (and others like me)...others may see NO problem in being "raped"...some may even enjoy it while others may long for it. To each their own. :rolleyes:
 
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#16
It seems like some people are overly focused on a few things.
Let's forget about cryptocurrency for now and just consider this example:

A person operates a business and receives payments into their bank account.
The individual conducts the sale of their business in full compliance with the law and without any unethical behavior.
All legal obligations are fulfilled, and the process takes place entirely within their home country without any prior involvement in Spain.

Upon completion of the business sale, the individual has clean funds in their account and ceases all business activities, resulting in zero income.
They now intend to purchase land in Spain and sustain themselves using the balance in their bank account,
which amounts to less than 2 million euros. The sole expense they anticipate is the Transfer Tax (ITP/ITPAJU) (~10%), legal fees,...,
which is mandatory when acquiring property in Spain.

Is there a possibility that the Spanish tax authorities might engage in any dirty practices to 'rape you financially' in the future?

Consider the situation of elderly individuals over 65 who rely on their lifetime earnings to reside in Spain.
Do they need to fear being 'harassed' by Spanish tax authorities in their daily lives?
 
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#17
WormCasting said:
It seems like some people are overly focused on a few things.
Let's forget about cryptocurrency for now and just consider this example:

A person operates a business and receives payments into their bank account.
The individual conducts the sale of their business in full compliance with the law and without any unethical behavior.
All legal obligations are fulfilled, and the process takes place entirely within their home country without any prior involvement in Spain.

Upon completion of the business sale, the individual has clean funds in their account and ceases all business activities, resulting in zero income.
They now intend to purchase land in Spain and sustain themselves using the balance in their bank account,
which amounts to less than 2 million euros. The sole expense they anticipate is the Transfer Tax (ITP/ITPAJU) (~10%), legal fees,...,
which is mandatory when acquiring property in Spain.

Is there a possibility that the Spanish tax authorities might engage in any dirty practices to 'rape you financially' in the future?

Consider the situation of elderly individuals over 65 who rely on their lifetime earnings to reside in Spain.
Do they need to fear being 'harassed' by Spanish tax authorities in their daily lives?
Click to expand...

This situation change completely what you asked at the beginning.

Is there a possibility that the Spanish tax authorities might engage in any dirty practices to 'rape you financially' in the future?

No.

Do they need to fear being 'harassed' by Spanish tax authorities in their daily lives?

Short answer, no. But spanish goverment is unpredictable.

Spain is a country completely divided politically.

In Spain, a multitude of scenarios can happen within a few months. Since there is a motion of censure against the current government and it is replaced by another completely opposition one, such as there is a modification of the Constitution, a tax increase (or inventing new taxes) like any senseless situation you can imagine.

Dealing with the government of Spain is like dealing with a girlfriend with multiple personality disorder.

If you like drama, Spain is your country.

Asking if you can have peace of mind with your money when dealing with the Spanish government is like flipping a coin.
 
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