East European countries: Do they care about collecting Tax?

[banafinfodafuggiano]

I'm a EU (Spain) + Canadian Citizen.
I have lived most of my life in Canada and looking to relocate back to either Europe or Asia.

Let's say I moved to Poland and Czech republic, renting one house in each of these two countries and spending 6 months a year in each of these two places.

Would they want to tax me on my personal income and would they even go look into my income if I reported less than what I actually earn?
Do these countries tax your foreign corporate income if kept abroad (e.g: profits held in Hong Kong company) like Australia, Canada, etc...do?

For example: Company makes $800K in profits a year, keeps it in the HK bank account, and I pay my self a small salary of $7K a month just to pay bills, rent, food, etc... to my
personal bank account opened in Singapore/UK/ USA. (obviously not a bank in that east europen country I'd live in).

how would they even know I am living in their country if I don't register myself with the Tax department anyway, it's Schengen and I can move freely in and out without anyone know this?

 

[void]

Let's say I moved to Poland and Czech republic, renting one house in each of these two countries and spending 6 months a year in each of these two places.

Would they want to tax me on my personal income

depends whether you're a tax resident (for example in case of Czech republic it's either more than 183 days or having a "permanent home" in the country)
if so then world wide (+ DTT)
if not then local income only

and would they even go look into my income if I reported less than what I actually earn?

practically speaking (mostly) no but it doesn't change anything on your liability

Do these countries tax your foreign corporate income if kept abroad (e.g: profits held in Hong Kong company) like Australia, Canada, etc...do?

yes - if the decision making and management of the company is done from CZ then formally it's subject of the local corporate tax

how would they even know I am living in their country if I don't register myself with the Tax department anyway, it's Schengen and I can move freely in and out without anyone know this?

nobody cares if you're legally in Schengen
if you're careful or extra careful nobody will ever know and care - CZ/PL is no Spain or France

 

[banafinfodafuggiano]

depends whether you're a tax resident (for example in case of Czech republic it's either more than 183 days or having a "permanent home" in the country)
if so then world wide (+ DTT)
if not then local income only

practically speaking (mostly) no but it doesn't change anything on your liability

yes - if the decision making and management of the company is done from CZ then formally it's subject of the local corporate tax


nobody cares if you're legally in Schengen
if you're careful or extra careful nobody will ever know and care - CZ/PL is no Spain or France

What's a "permanent home" in the country?


Ok makes sense. So would it make more sense to report income and pay an annual tax return (lower than what declared) and also do not pay any corporate Tax?
Do you know about Poland?

 

[void]

What's a "permanent home" in the country?

believe or not this bulls**t is really in the law.... it means whatever can be considered a place where you can come any time and stay or where you have your personal belongings

there are several famous cases where it was applied in an extreme form - like a guy who lived and worked in another country (without DTT with CZ) but had his own room in the house of his parents - after years at the court with the tax office he ended up paying taxes to both countries

Ok makes sense. So would it make more sense to report income and pay an annual tax return (lower than what declared) and also do not pay any corporate Tax?

I cannot give you any specific advice....

Do you know about Poland?

not as much as about CZ

 

[Larin]

You are basically asking if PL/CZ enforce their tax laws, because what you are suggesting is straight up tax evasion. And just like any crime, you are fine until caught. What's the probability of being caught? Who can say?

But, why engage in tax evasion when there are some many ways to legally minimize your tax liability and live in peace?

 

[banafinfodafuggiano]

You are basically asking if PL/CZ enforce their tax laws, because what you are suggesting is straight up tax evasion. And just like any crime, you are fine until caught. What's the probability of being caught? Who can say?

But, why engage in tax evasion when there are some many ways to legally minimize your tax liability and live in peace?

Other than moving to the UAE or a country that doesn't tax foreign income, what else do you suggest?

 

[EliasIT]

For example: Company makes $800K in profits a year, keeps it in the HK bank account, and I pay my self a small salary of $7K a month just to pay bills, rent, food, etc... to my
personal bank account opened in Singapore/UK/ USA. (obviously not a bank in that east europen country I'd live in).

I'm not sure how you imagine you will avoid CRS and the banks' obligation to disclose information about even Polish or Czech citizens - it seems to me that you haven't read many of the threads here.

I know nothing about how aggressive Poland and the Czech Republic's tax authorities are - they don't seem too interested in their female population, nor that half of Europe's expensive cars end up there - but maybe they care about taxes! The fact is that banks will inform them that there are records on you in Hong Kong - so if there's a poor Pole in the tax authority looking for a promotion, he might take on your case and go after you.

I wouldn't risk it; instead, either settle in a country where I can accept the tax or move my money into crypto, which isn't currently reported, and then slowly convert crypto to euros as needed.

 

[Marzio]

Would they want to tax me on my personal income and would they even go look into my income if I reported less than what I actually earn?

No they obviously have plenty of money and they wouldn't care.

 

[EliasIT]

No they obviously have plenty of money and they wouldn't care.

I love this kind of short comment without anything to back up the claim - it's pointless to post such things. No tax authority or country has so much money that they won't prosecute taxpayers - it's just stupid to make such a post! Get your facts straight! Justify your post! Don't throw around silly statements that make no sense!

 

[Marzio]

I love this kind of short comment without anything to back up the claim

Sarcasm - Wikipedia

en.wikipedia.org

it's just stupid to make such a post!

I obviously agree with you.

Asking if a country cares about people paying taxes it's just stupid and the only answer it deserves is sarcasm.

 

[EliasIT]

Sarcasm - Wikipedia

en.wikipedia.org

I obviously agree with you.

Asking if a country cares about people paying taxes it's just stupid and the only answer it deserves is sarcasm.

No, you've misunderstood that. The only right way to respond to something stupid is not to respond at all. By responding, you lower yourself to the same level as the person you think is stupid.

As a starting point, I don't think there are any stupid questions here. We can't all be as incredibly smart and knowledgeable as you. But you know what, just move on to the next thread if you read something stupid. Don't bother arguing or commenting, it's pointless.

And to avoid ruining this thread, I will report our posts to the MODs. I think it's a shame for the Original Poster that we spoil it for others in this way - think about it.

 

[freegeek]

Why do people keep making these treads thinking that they can pay no taxes at all in Europe (unless you live in Monaco)? Move to a country that has no taxes if you don't want to pay taxes. You probably can get away with your plan for a couple of years if you are lucky but at some point you will get caught. Get a tax residence in a low tax country like Bulgaria, pay your taxes and enjoy your travelling. Bulgaria will join Schengen 31 March 2024.

 

[JohnLocke]

Thread closed - I agree with what is said here - if you can't contribute to something positive, just move on please.

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