Digital nomad tax

KJK

Building Trust
Entrepreneur
The "stateless person" concept is very interesting, if you want to play with the system a little bit. I think there are also a lot of stateless people in Palestine/Israel. Also there are some countries that do not give citizenship even if you lived in the country for 50 years or if you were born there - so under certain situations, you may be stateless.

However, I must stress that (as was already mentioned) a stateless person, a non-resident and a "perpetual traveller" are really three different things.

However as a person without any tax residency its normally very easy to just use your previous address and tax number, while a stateless person doesn't have a passport and can't open an account at all.
Can it be used against you later? The fact that you used an "old" tax ID number from your home country even when you aren't a resident there anymore?
 

fshore

Trusted Member
Business Angel
The "stateless person" concept is very interesting, if you want to play with the system a little bit. I think there are also a lot of stateless people in Palestine/Israel. Also there are some countries that do not give citizenship even if you lived in the country for 50 years or if you were born there - so under certain situations, you may be stateless.

However, I must stress that (as was already mentioned) a stateless person, a non-resident and a "perpetual traveller" are really three different things.


Can it be used against you later? The fact that you used an "old" tax ID number from your home country even when you aren't a resident there anymore?
Yes if you do that to hide your new tax residency But if you don't have a new tax residency then I don't see how that can be an issue. But it might depend on the specific situation and country in question. And it might change in the future with changes in crs.
 

KJK

Building Trust
Entrepreneur
Yes if you do that to hide your new tax residency But if you don't have a new tax residency then I don't see how that can be an issue. But it might depend on the specific situation and country in question. And it might change in the future with changes in crs.
I agree 100%, thanks!

My concern is that the home country may want to keep its shee.... I mean citizens... as residents under all circumstances.
I also agree it may get more and more strict in the future, with nation states losing power, they'll try to implement more and more restrictions, especially the EU (USA already does it very successfully).

So even if you break ties with your home country, no family, no business or personal activity, there's no proof you're staying in your home country, you do no activities there etc., despite all that some bureaucrat from your home country may still say "Oh so you were a resident Thailand or wherever for a year or two but then you came back which means your center of vital interests was all the time at home where your parents live"... Or something like that. I've heard some stories about this (namely for citizens from Finland and Russia) and they seem to make the digital nomad concept almost impossible to reach.
 

enceladus

Banned User
BANNED MEMBER
Entrepreneur
How about this scheme for a digital nomad whose home country requires a tax certificate in a new country before they will stop taxing you?
- Get a permanent resident visa in Paraguay
- Do not stay 183 days, but do stay enough to do some local (taxable) work, or buy real estate there and rent it out.
- Go traveling and pay the taxes on your local income for that year

The PR visa in Paraguay doesn't require a physical presence, so you don't lose your resident status when you leave. And by filling an income tax report, that should be enough proof for your home country in case they ask.

Thoughts anyone? BTW, what is the practical difference between a tax residency certificate and a tax filling report?

To clarify the above idea: Paraguay doesn't tax your foreign income.
 

darkster

Trusted Member
Business Angel
Mentor Group
Commercial Service
How and how easy can you get a permanent resident visa in Pataguay? What's the risk involved?
 

mnschwarz

Offshore Agent
Business Angel
It seems many confuse tax residency, permanent residency, citizenship and just residency. This will of course depend on your home country and their laws / views but for the most part:

Where you are legally obliged to pay taxes is your tax residency and this will often be based on where you live in actuality. Getting permanent residency in a place like paraguay, panama etc might be easy but it means nothing on it's own. Permanent residency might however be a requirement for your country, but it is one small requirement. You have to actually live there if you want to cover yourself. This means having your day to day banking there, a home there, mail goes there etc. I have seriously heard of cases where people got done for not cancelling magazine subscriptions or changing mail addresses etc.

If you don't have any of this or can't prove it, often you will simple be considered a tax resident of your home country, even if you haven't been there for decades. For this reason it's always best to have tax residency somewhere.

On a seperate note, legally if you're in Paraguay for example and performing work online as a digital nomad, you should be paying tax there as the work is performed locally. No one actually does it in reality but food for thought ;)
 

enceladus

Banned User
BANNED MEMBER
Entrepreneur
It seems many confuse tax residency, permanent residency, citizenship and just residency. This will of course depend on your home country and their laws / views but for the most part:

Where you are legally obliged to pay taxes is your tax residency and this will often be based on where you live in actuality. Getting permanent residency in a place like paraguay, panama etc might be easy but it means nothing on it's own. Permanent residency might however be a requirement for your country, but it is one small requirement. You have to actually live there if you want to cover yourself. This means having your day to day banking there, a home there, mail goes there etc. I have seriously heard of cases where people got done for not cancelling magazine subscriptions or changing mail addresses etc.

If you don't have any of this or can't prove it, often you will simple be considered a tax resident of your home country, even if you haven't been there for decades. For this reason it's always best to have tax residency somewhere.

On a seperate note, legally if you're in Paraguay for example and performing work online as a digital nomad, you should be paying tax there as the work is performed locally. No one actually does it in reality but food for thought ;)
Hi, I don't want to sound arrogant or anything, but I'm well acquainted with the concept of tax residency. So I invite you to take a second look at my proposition.

For some countries, breaking tax residency is as simple as not overstaying 183 days. That is the case of Brazil, for example. For others, specially in Europe, one has to cut connections so that you can make a case that your home country isn't your "center of vital interests" anymore. You will also be required to demonstrate that you are paying taxes in a new country, like showing a tax residency certificate, before your home country will finally "release" you.

Enter Paraguay. Their permanent residency visa comes with a residential address - what address is this is not important now. You get an official paper (doc 1) stating that you live there which you can show back home. Secondly, you can request a tax ID and pay taxes voluntarily for whatever local income you have (doc 2). Now, the Paraguayan law also states that someone is automatically a tax resident after 183 days living there. I am arguing without proof that even if you don't stay 183 days in Paraguay after leaving your home country, your PR + (doc 1) + (doc 2) are strong enough evidences that you can show in your home country to break tax residency there.

And if you don't agree with my argument (if you don't, please tell me why), one could well stay 183 days in the first year in Paraguay, become a tax resident there officially and break tax residency in their home country. Then you could leave and travel freely, knowing that as long as you don't stay 183 days anywhere else, your tax residency will be still Paraguay (and NOT your home country) because you are have permanent residency visa there, you have an official address and that's your new center of vital interests. I hope it doesn't sound too complicated, in reality it's quite simple.
 

enceladus

Banned User
BANNED MEMBER
Entrepreneur
How and how easy can you get a permanent resident visa in Pataguay? What's the risk involved?
Very easy for Americans and Europeans, not so much for Africans, Arabs and Asians. Investment between $2k and $3k plus a 3 day trip to Asuncion. Once there you must make a $5k cash deposit to a government bank to prove your economic capacity. After 6-8 months they mail your ID and you may come back to get your $5k back. So all in all, 2 quick trips.

The risk of being scammed or dealing with low quality providers is real, but IMO it's low.
 

Travelasia

New Member
Sorta kinda. You are still not allowed to WORK without a work permit in Thailand. Work permits are only given to people working for Thai registered companies. If you ignore that specific labor law, and work in Thailand anyway, then you are still exposed to the tax laws. If you get compensated directly for your work (=salary), then by law you need to pay tax in Thailand regardless of remittance.

Note that none of this is actively being enforced in Thailand at the moment. If you work online then you are relatively safe at the moment, but it can easily change.

Anyway, the excerpt you were referring to is regarding dividends. Dividend income received abroad is only taxed (and requires reporting) if it was remitted to Thailand within the same calendar year in which it was received. So if you do decide to try it out, make sure to structure it so you do not actually "work" and receive a salary. You just receive dividends from a business that you own, but not directly operate, and you never remit in the same calendar year.

The Philippines make it a lot simpler, but that's a different topic for a different day.
hello

please could you explain how to make it in philippines ?
 

Mencjusz

New Member
For some countries, breaking tax residency is as simple as not overstaying 183 days. That is the case of Brazil, for example. For others, specially in Europe, one has to cut connections so that you can make a case that your home country isn't your "center of vital interests" anymore. You will also be required to demonstrate that you are paying taxes in a new country, like showing a tax residency certificate, before your home country will finally "release" you.
I would also add that 'center of vital interests' can be very tricky concept. For example, if you own a house in country A and live, work, pay taxes in country B, you need to check if country A have tax agreement with country B. If not, officially, you would have to pay double tax (based on proportionality - if tax in country B is lower than in country A).

I have also observed that having an active bank account in country A can result in tax obligations.
 

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