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DeGiro is asking for my tax residency and CRS status

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DaveFischer

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Mar 24, 2020
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#1
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I'm travelling and working around the world as a digital nomad in 3rd world countries and not spending more than 6 months in any specific country. So far I've been fortunate to leave my home tax country and not be in the tax net of any country.

However, I have been investing money with different stock brokers. One of which is DeGiro. They've sent me the following request for information:
You must indicate in which country you are tax resident and what the corresponding Tax Identification Number (TIN) is. This is a self-certification form to determine your CRS and FATCA status.
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What is the best course of action?
 
#2
Hey,

A person can not be without tax residence, even nomads. That's why it would be wise for you to setup a residency in some tax-friendly jurisdiction (for example in UAE).

Otherwise, you are at risk to be challenged by your home country (or other countries where you spend time).

You can't tell the bank (or any other financial institution) that you are nowhere taxed.
 
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#3
Some jurisdictions will give you a tax number when you're not tax resident. Maybe declare some small amount of work while there, or for example in Georgia you can get a tax number for receiving parcels from abroad. I don't know if that's enough to satisfy your broker.

Obviously your broker can then send information to the tax office, so you want to make sure you're clearly not tax resident if investigated.

It's unusual to have no tax residency and while I don't agree that you must have one, things are getting more difficult and I can't think of anyone who recommends it now. :(
 
#5
@Gediminas if your domicile country and all the countries you visit have very clear tax residency rules, I am sure you can be legally nomadic. e.g. a UK passport holder who spends under 16 days in UK won't be tax resident. If they spend small parts of the year in 180/183 day countries such as in Georgia, UAE, Thailand, then they won't be resident there either.

I completely agree that it's almost impossible to make it work. The fictitious person above might well be taxed as a non resident in at least two of those countries above due to PE, work or entrepreneurial activity.

And as @DaveFischer is now experiencing; banking, business and other things are getting harder. I don't think KYC-free crypto ATMs will be around for too many more years.
 
#6
DaveFischer said:
However, I have been investing money with different stock brokers. One of which is DeGiro. They've sent me the following request for information:
What is the best course of action?
Click to expand...

Which address is the Degiro account registered to? Btw they will have to report to the address on record regardless of what you put on Self Cert.

Best course of action is complete the form they sent you naturally.
 
#8
Hydrogene75 said:
Send them a fake utility bill, then withdraw your money and choose a CFD broker (they don't report CRS)
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They are not asking for proof of address but a TIN. The best course of action would be to get an official tax residency certificate in a tax-friendly jurisdiction as Gediminas suggested.
Withdrawing all money when you have a pending unanswered compliance request is quite a good way to have your account frozen I would think.
 
#9
I think OP is finding out there is no such thing as a digital nomad when it comes to banking/brokers etc. Unless your willing to just use banks and brokers in non-CRS countries like Puerto Rico etc then the concept is a myth that the uninformed fall for.

The account is gonna be reported to any countries address that was on the brokerage account during the year regardless.
 
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#10
Martin Everson said:
I think OP is finding out there is no such thing as a digital nomad when it comes to banking/brokers etc. Unless your willing to just use banks and brokers in non-CRS countries like Puerto Rico etc then the concept is a myth that the uninformed fall for.

The account is gonna be reported to any countries address that was on the brokerage account during the year regardless.
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That's it.

OP you are using some "old school" Digital Nomad Setup by just de-registering yourself from your home country and keep travelling - people were using 3-5 years ago without to many issues but due to having each year tighter laws within the EU this will be more and more difficult.

All your financial institutions like Banks, EMI's and Brokers are verified on your old home country - so while you are maybe fine with this - it's not fine for the financial institutions. Most likely you are from a reputable EU country and Citizen of it - so due to your Tier 1 passport the banks doesn't really care - however more and more regulation is coming - so expect that other financial institutions you are using actually will follow with what DeGiro is asking for right now - and even worse - in EU coutries with aggressive tax authorities like France & Germany having financial institutions within your old home country can even create substance that can then be used by the Tax Authorities to imply you are still having some economy connection / subastance to your home country - especially if we are going into 6 / 7 figure amounts you are hoding.

A straightforward solution would be (like mentioned earlier by colleague @Gediminas ) to setup a Dubai Company with Residence Visa and local UAE bank accounts in combination with Interactive Brokers for example. The Dubai Company Formation grants you the Residence Visa and the access to the local UAE banks. Once the bank accounts are setup you can proceed with Interactive Brokers. This setup doesn't require the substance like we know it from the EU to get the bank accounts and Interactive Brokers is following straight the fact that you have your Company, Residence and Bank Accounts within the same country.

Furthermore Interactive Brokers is understanding the UAE as jurisdiction and they are fine if you are telling them you don't have any TIN and the reason for this is that the country (UAE) doesn't issue a TIN.

So Dubai could be your Business & Finance Center with the minimum requirement of being there every 6 months for 1 day - that's nothing compared to what you can achieve with this setup.

If you can't effort such a setup in terms of being every 6 months for 1 day in Dubai - you have to deal with the direct consequences - which is in the case of DeGiro account closer.
 
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#12
Thanks, I'll try to get a Thai Tax Identification Number. I hope I won't have to do a Thai tax return every year.

I'm OK with losing my DeGiro account, if they don't accept customers from Thailand.
 
#13
DaveFischer said:
What is the best course of action?
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I was in a similar kind of problem with the same broker a few years ago. There is no way around other than providing them a tax number, as already told by others. You need to become tax resident somewhere, if you want to own stocks. Please note Degiro does not service all countries in Europe. Quite many low tax EU countries are not included.

Degiro's owner Flatex has more available countries, likewise e.g. Interactive Brokers and Saxo. They, too, aren't flexible with tax residency. Nobody is.
 
#15
Gediminas said:
But we are living in a highly regulated world and being a ghost has become almost impossible (in a legal way).
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I can agree with that, you really need to have BIG amounts of hidden money if you want to be a ghost in this world. Beside the money you also need to get organized at some point so you need to be clever.
 
#16
fatcat1970 said:
If he were to give the TIN of his previous "home" country and he really is not a tax resident there, what would happen? Surely telling DeGiro a TIN of a country doesn't automatically make him a tax resident there?
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Problems will arise at least if he signs the form W-8BEN (for trading U.S. stocks). The U.S. tax man will find out and contact Degiro. Something like this happened to me. Degiro prompts clients to fill W-8BEN even if you don't plan to trade U.S. stocks.
 
#20
Martin Everson said:
The account is gonna be reported to any countries address that was on the brokerage account during the year regardless.
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To my best knowledge (I am not an expert of CRS) the account will be reported to the countries address (i.e. valid customer contact address) which is on record on 31-December. If the account is closed before that date it will be reported to the countries address on record on the day of account closure.
  • Example 1: If the bank's customer moved on 01-June-2020 from a CRS country to a non-CRS country his account becomes non-reportable and will not be reported to anybody for that specific calendar year, considering the customer does not close the account.
  • Example 2: Same as example 1, but the customer closed his account on 15-May-2020. Since the bank account has been closed before the customer moved from a CRS country to a non-CRS country it will be reported to the address the bank has on record on 15-May-2020.
@Martin Everson I would appreciate your thoughts on this. It has been explained to me that way some time ago but I am not sure if that is correct.
 
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