EU citizen/ hired in dubai/ nomad- tax structure

[b3ri]

Hi all,
I am a fan of this forum and since 2021 I am having a complicated situation where even accountants are struggling to understand.

I am Italian, this is my only passport. I left Italy 15 years ago, and for the last 7 years I have been living in Dubai full time with a job there. Since 2019 my company turned remote and I can live anywhere I want as long as I keep my visa in Dubai. I did a lot of research regarding keeping the tax residency in Dubai and it is still confusing. The end goal for me is to keep my full residency in Dubai while spending the least amount of time there. I am getting bored of the desert after 7 years and also it is unnecessarily expensive.

This is how I lived in 2021 and I would love to have this structure if it is possible/legal:
- 3/4 months in Dubai in Airbnb (potentially buy an house there in 2022/3
- 4 months in Georgia (I own an apartment there)
- 3/4 months in Italy (in my parents place as they are getting old I would like to spend time with them)

My company pays me in AED in a Dubai bank account. Money in Italy are coming to an N26 account from profit making to different investments or transferred from my Dubai account.

I know that for one year nothing really will happen but can I keep the above structure and still “pay taxes” in Dubai? Except the N26 account I don’t own anything in Italy and i often not even rent a car. Each month I spend maximum €2k

Thanks guys!

 

[ecool]

I'm not a tax advisor but I can give you my experience as being done something similar in the past. From my experience, Dubai will not have any problem with you, as long as you go there at least once every 6 months (even if it's for 1-2 days) to keep your visa active. The problems might come with Georgia or Italy.

Let me explain. As you will not be spending more than 6 months in a year anywhere, Georgia or Italy might want to claim your tax residency as they might see you are spending some time there and you have some interests over there (an apartment in Georgia and family in Italy). I'm not familiar with tax laws in Georgia or Italy, but I'm applying the basic rule which most countries have that you are tax resident in a country if you spend more than 6 months in a year in the country or you have a substantial interest in the country (family, etc) when not residing more than 6 months somewhere else.

I would say, if you move a small amount of money and you try to keep a low profile, nothing should happen and you should be able to live like that happily, always living "like a tourist" in Georgia or Italy (meaning keeping a low profile from banks/government perspective over there and not doing many of the things with the government like someone living there would do).

But be aware that at any point things can happen where flags can be raised and then you can be asked by the governments to prove your tax residency. In that scenario then you might encounter problems, so keep that in mind. That is why I said to keep a low profile in Georgia and Italy.

 

[b3ri]

Thanks for your answer!

Georgia is not a big deal. They won’t check and if they do I can pay to a 1% taxes, I do pay taxes on my rental income from the house and the bank I took a loan knows that I am resident in Dubai.

Italy is more tricky, I am keeping low profile in a sense that I don’t even use their free medical services as a citizen but I actually pay for the medical bills using my Dubai insurance. However, I do hold an Italian passport and I am coming there for 4 months a year spending roughly $2k a month. Ideally I know I should probably stay 183 days a year in Dubai but I am trying to see if that rules applies or there is any workaround.

Renting/ pay bills in Dubai is super expensive if you are only using the apartment 6 months as well. And you cannot subrent in Airbnb.

Thanks for your help though! I really appreciate your feedback.

 

[ecool]

I would recommend then that you hire some lawyer or similar in Italy and ask about Italy tax residency and how likely is that they dig in your file. Maybe even if he had experiences of someone getting asked about tax residencies certificates and so on. This goes country by country, some countries are less likely to dig on files while others are constantly looking to make money from people.

I've also heard that when you don't live for at least 6 months in a year in a place, it's good to keep all living expense receipts and invoices from the countries you live as it can help in the case where you have to prove your real living place for tax purposes. This is when you cannot get a tax residency certificate in any place because you are not residing for more than 6 months.

So just ask yourself the question, if Italy asks you to prove that you don't live in Italy but you are just there visiting your family as a "tourist", how can you prove it? Without the obvious tax certificate which you will not be able to get. The more proof you have, the better.

 

[heliotrope]

If you could dedicate a couple of months to Cyprus, you could get a tax residence certificate from there. You'd pay a bit more than Dubai. That said, because you're an Italian citizen/have been registered there at some time, you're presumably on the AdE's radar, so to speak, and quite a bit more likely to receive scrutiny (whether random or informed by all the data the AdE and other tax departments are increasingly in the practise of hoovering up) than some genuinely random tourist. Given the scenario you've described a very strong case could be made that your centre of vital interests is in Italy and that you're liable for tax on your worldwide income there. In which case they might even regard a tax residence certificate from Cyprus (on the basis of 60 days) as worthless. If I were you, I would be very conservative about e.g. taking dividends or crypto profits while this state of ambiguity persists.

 

[GPT]

Make sure to not own the property in Georgia in your name and Georgia will not be a problem. Italy will not be a problem if you do not stay for more than 3/4 months. Once you get to the 180-ish days it can become tricky. Keep track of your travel itinerary and be sure to substantiate it with plane tickets etc. And owning something in your name in Dubai will always help build your case.

Another thing some EU countries apply is where your traveling originated from. Make sure to always book a return flight when you go to Italy so that it is clear you are leaving again. If you want to avoid that hassle... Fly to France, Switzerland, Austria and go by rental car.

Keep furthermore in mind that most countries officially write you off from tax collecting perspective after 10 years. Hang in there. You are already on the good side of things.