Confidentiality of companies in another EU countries?

[gnud]

If I create a company in another EU country, open a bank account for it there, never distribute dividends or pay myself a salary, what are the chances my country of residency will find out? Will it be reported through the DAC or CRS?

 

[Sols]

Yes, it will be reported.

 

[gnud]

Yes, it will be reported.

Even if I rent an apartment there, give them my local address, possibly even register for residency to get a certificate, and never reveal I actually reside elsewhere?

 

[Sols]

The bank can still use other indicators that you are resident elsewhere, such as looking at IP address you log in from, physical geo-location of your phone/device, frequency/concentration of senders/beneficiaries, and account details on transactions. But the risk of reporting goes down significantly if you take all the steps you mentioned.

 

[gnud]

The bank can still use other indicators that you are resident elsewhere, such as looking at IP address you log in from, physical geo-location of your phone/device, frequency/concentration of senders/beneficiaries, and account details on transactions. But the risk of reporting goes down significantly if you take all the steps you mentioned.

Yes, they can. But will they? I've used my phone with my local plan, and my bank card for 2 years abroad, even left my apartment for that time, and no one said a word.
I'm more concerned about the exchange of information they have in place. Do they actually exchange tax residency information based on e.g. passport?

 

[Sols]

Yes, they can. But will they?

Yes, they will. I have seen it reported by members here and elsewhere. It's not every bank doing it all the time. But it does happen.

Had a case recently where a bank unilaterally decided to consider a customer non-resident because they had noticed a pattern of transactions and details in transactions that indicated the person was non-resident. They may have looked at IP address, device location, and card point of sale usage as well but did not disclose that much.

Do they actually exchange tax residency information based on e.g. passport?

They can and do. But again, not always and not for everyone. They look at more a collection of data points to make a decision.

If you expect privacy within EU, you're playing a dangerous game.

 

[gnud]

Yes, they will. I have seen it reported by members here and elsewhere. It's not every bank doing it all the time. But it does happen.

Had a case recently where a bank unilaterally decided to consider a customer non-resident because they had noticed a pattern of transactions and details in transactions that indicated the person was non-resident. They may have looked at IP address, device location, and card point of sale usage as well but did not disclose that much.


They can and do. But again, not always and not for everyone. They look at more a collection of data points to make a decision.

If you expect privacy within EU, you're playing a dangerous game.

Well it's not illegal to live in 2 countries at once, with open borders it's hard to prove how much time was spent where. If I keep the 2 identities separated, use respective bank cards and phones with local SIMs in their respective countries, do bank transfers only locally within the country, have 2 addresses in the respective countries, cross borders in cars, use local proxies to access bank accounts, use cash as much as possible, the only common link is a passport.

Once I gain a second citizenship, with a name change / localization, it should be virtually impossible to link those two persons.

 

[Thepopo]

Well it's not illegal to live in 2 countries at once, with open borders it's hard to prove how much time was spent where. If I keep the 2 identities separated, use respective bank cards and phones with local SIMs in their respective countries, do bank transfers only locally within the country, have 2 addresses in the respective countries, cross borders in cars, use local proxies to access bank accounts, use cash as much as possible, the only common link is a passport.

Once I gain a second citizenship, with a name change / localization, it should be virtually impossible to link those two persons.

It is illegal to declare residency in a country where you are not effectively living

 

[gnud]

It is illegal to declare residency in a country where you are not effectively living

Yet the world is full of residents of Monaco.

With the 180 day rule and two centers of interest, it's in the range of possibilities to have 2 tax residencies. With enough ambiguity, I decide what's real, if it comes to that.

 

[gnud]

oi mario u havin' a laff?? come n fite me m8!

 

[Helkins]

My residency is so messy no bank knows who to report to and no government knows where the heck I actually live. Been living like this for the past 4 years and no issues so far

/edit - that is to say that you could get away with this

 

[Sols]

Well it's not illegal to live in 2 countries at once, with open borders it's hard to prove how much time was spent where.

That's why if this blows up and goes to court, it's up to you to prove where you were. The burden of proof is often reversed for these types of crimes. Guilty until proven innocent, with some caveats and restrictions. Depends on applicable laws.

Not saying it's impossible to achieve what you plan here, especially if you're dealing in smaller amounts and not on anyone's radar. But it's not a risk I would recommend to anyone whose financial well-being and personal liberty is important to me.

Learning from the past is in this particular instance a fallacy, because the future is headed towards a very different path than history would show. There are people who have been getting away with this for 10+ years. That doesn't mean it's going to work for 10+ more years, as banks are under increased obligations to fight not only money laundering but also tax evasion.

 

[gnud]

That's why if this blows up and goes to court, it's up to you to prove where you were. The burden of proof is often reversed for these types of crimes. Guilty until proven innocent, with some caveats and restrictions. Depends on applicable laws.

Not saying it's impossible to achieve what you plan here, especially if you're dealing in smaller amounts and not on anyone's radar. But it's not a risk I would recommend to anyone whose financial well-being and personal liberty is important to me.

Learning from the past is in this particular instance a fallacy, because the future is headed towards a very different path than history would show. There are people who have been getting away with this for 10+ years. That doesn't mean it's going to work for 10+ more years, as banks are under increased obligations to fight not only money laundering but also tax evasion.

That's why ambiguity will be useful. I will watch and respond to changing regulations, for now it looks like it may work.

 

[Helkins]

That's why if this blows up and goes to court, it's up to you to prove where you were. The burden of proof is often reversed for these types of crimes. Guilty until proven innocent, with some caveats and restrictions. Depends on applicable laws.

Not saying it's impossible to achieve what you plan here, especially if you're dealing in smaller amounts and not on anyone's radar. But it's not a risk I would recommend to anyone whose financial well-being and personal liberty is important to me.

Learning from the past is in this particular instance a fallacy, because the future is headed towards a very different path than history would show. There are people who have been getting away with this for 10+ years. That doesn't mean it's going to work for 10+ more years, as banks are under increased obligations to fight not only money laundering but also tax evasion.

It's not so hard to fake all the necessary documents that'd be sufficient proof in such cases. You can very well start living in say Malta, get a local bank account, get resident ID, pay some fake rent to a lawyer (that'd give you back the money or use it for other services you're normally paying him) give him your capped debit card and allow him to spend on daily stuff like coffee for 1€. Or same scenario, lease an apartment as you'd normally and sublet it either on AirBnB (and get additional money from it) or normally for a discounted price and get the residency, pay the utilities and of course figure out the way to leave any other paper trail such as those bank statements. That way you can live in any other country in EU (provided you rent other properties or purchase them in your holding company name or somebody else's)

That's why ambiguity will be useful. I will watch and respond to changing regulations, for now it looks like it may work.

Honestly, although many things are digitalised many processes are still not and it's hard for governments to (just yet) exchange information quickly and automatically without any issues, hence for the time being living like that works. In the future it might not and you need to make a plan in case regulations change rapidly.

 

[gnud]

f**k it. I'll simply move altogether. It's not worth the sleepless nights.

 

[Mr Gus]

You can live in two countries but I would not declare residency in your home country, but you can still live there if you play it smart, especially if your new country and your home country have signed a tax treaty, just follow the rules given by the tax treaty and you are good to go.

 

[Mr Gus]

Also depends on where you are from, if you are from the UK you can just do the statutory residence test and see if you are tax resident or not.

 

[GPT]

Even if I rent an apartment there, give them my local address, possibly even register for residency to get a certificate, and never reveal I actually reside elsewhere?

Without registering in the country the bank will report you.

With a certificate it might -still- report you based on your issued passport -> im personally aware of a couple of cases where this happened.

 

[GPT]

Well it's not illegal to live in 2 countries at once, with open borders it's hard to prove how much time was spent where. If I keep the 2 identities separated, use respective bank cards and phones with local SIMs in their respective countries, do bank transfers only locally within the country, have 2 addresses in the respective countries, cross borders in cars, use local proxies to access bank accounts, use cash as much as possible, the only common link is a passport.

Once I gain a second citizenship, with a name change / localization, it should be virtually impossible to link those two persons.

If you want to play that game... Live in three countries minimum. The 180 days principle applies in most countries (not the UK). It does bring along a huge administrative burden which becomes very difficult to proof if you do this with a family.

 

[gnud]

The country where I reside now is not the country of the passport / citizenship. The new country wouldn't be my country of citizenship either. So I'm not sure who would they report me to.
I provide them with a local address, they can ask for a tax residency, I say I live there, won't give them any foreign tax id, so there's automatically nothing reportable under the CRS.
I'm not sure if they can ask me for a registration certificate when I have 3 months to register but I need to pay rent (and 9-5ers receive salary) now.