"Fake" residency to avoid CRS reporting?

Discussion in 'Offshore Bank Accounts' started by joelb, Aug 8, 2018.

  1. joelb

    joelb International Pirate ;-D BANNED MEMBER

    Banks are reporting your bank accounts to the country where you are resident according to the CRS rules. Well, it's not that hard to get a residency in a country in my experience, or even easier to fake it with some utility bills and etc. So the bank will report your bank accounts to your FAKE resident country because you provide those documents, proving you are a resident there. But in reality, you have no ties there. You don't live or work there, they can't find you tax you or do anything with you. They won't even try I guess.

    In the meantime your REAL resident country won't get any report of your bank accounts.
    What do you think dear forum members?
  2. Samuel Newman

    Samuel Newman Offshore Desk expert Mentor Group Entrepreneur

    I think, it looks like a good chance to get residence permit in a jail
    Martin Everson likes this.
  3. joelb

    joelb International Pirate ;-D BANNED MEMBER

    There are several articles about this on the internet:
    OECD releases consultation document on misuse of residence by investment schemes to circumvent the Common Reporting Standard - OECD

    Why should I go to jail?
    Just because I went to Portugal, rented an apartment and in an afternoon I went to the civil registry office to get a permanent residency?
    Everything is perfectly legal, so I can open a bank account while I am a Portuguese resident, so the bank reports to Portugal.
    Then I leave Portugal because I have the right to do it...
    And the bank keeps reporting to Portugal... who are totally not interested in my offshore accounts.
  4. Martin Everson

    Martin Everson Offshore Consultant Business Angel

    Do NOT attempt to do this ever. Newman is right, you have your whole life ahead of you. Read the below thread in full on this very subject:

    Freelance taxes planning
  5. joelb

    joelb International Pirate ;-D BANNED MEMBER

    I still don't understand why.
    To avoid confusion, here is an example:
    1.) I am a Hungarian citizen.
    2.) I am a Italian resident, I live and pay tax in Italy.
    3.) I went to Portugal for a month, rented a flat, applied for residency, got the residency, had utility bills, etc.
    4.) Right now I have all the documents about my Portuguese residency.
    5.) I am moving back to Italy, because Portugal is too rainy...

    But before I move back to Italy:
    - I open a bank account in Spain, using my Portuguese residency documents, utility bills, etc.
    - The Spanish bank will report my account to Portugal, where they can't and won't do anything with the information since I am not there, nor in Spain.
    - I am NOT going to lie to the Italian or the Hungarian taxmen, saying I am living in Portugal, I will tell them that I live in Italy, which is true.
    - I continue living in living in Italy for real, while I have a bank account in Portugal. Becuase there is NO legal obligation to close the account just because I moved.
    Yes, the bank requires me to report my address change, but it's not a criminal act to not report it, it's only a violation of the bank's internal terms and conditions, that no one cares about. I am not the only one who didn't tell their bank that I moved from A to B street, or county, or country.

    So why is this illegal?
  6. Martin Everson

    Martin Everson Offshore Consultant Business Angel

    So when you are opening the bank account and are asked by the Spanish bank to declare your tax residency and provide a Tax ID number you will have to give your Portugal Tax ID. Hence you will be subject to taxes in Portugal. Then you will tell Portugal when time comes to file a tax return that you are not living there. At this point they will ask for proof of where you are really living. At this stage you will be forced to update bank records with Italy as address. Then the investigation starts and Italy and Portugal directly communicate and exchange information under existing DTA (pre AEOI/CRS agreements) to resolve issue. At this stage it is determined that you have willfully made a conceited effort to under report in Italy and you will be prosecuted.

    You really have not thought any of this or are aware of how things work now in 2018.:( Basically the plan falls over early on when the bank will ask for self deceleration of tax residency.
  7. joelb

    joelb International Pirate ;-D BANNED MEMBER

    Aren't you from the US by any chance?

    Because there the FBI might ask people to testify, even over state borders and investigate, but internationally it's never going to happen.
    In another thread, you told about the Belize nominee director testifying under oath in court. It's the same thing... never going to happen.
    In my country, Hungary (and this is a fact, I am not lying, actually I even have personal experience in this) when the police finds out that the case has international stings, they drop it like a hot potato. They don't have the resources either the will to investigate over borders. And even if they do, the other countries just shred the incoming mails coming from Hungarian authorities.

    But you might be right anyway. Just because the system doesn't work in my country and I have these experiences, that doesn't necessarily mean that police/taxman in other countries are the same incompetent clowns.
  8. Martin Everson

    Martin Everson Offshore Consultant Business Angel


    Depends what the offense is. If it is a U.S Federal offense you committed then it does not matter where you are in the world. The U.S does and will exercise jurisdiction over the entire planet on Federal cases. However you have the right to be a fugitive for the rest of your life of course.

    You gave Italy as your example of where you live (see below). I gave you an answer for Italy not a backwater EU country like Hungary.

  9. globalconsultancy

    globalconsultancy New Member

    In theory, what Martin Everson said is 100% correct. In reality, no-one would chase you across state borders and start cross-jurisdictional tax investigations for 10,000 or even 100,000 EUR. All countries have limited resources and they tend to focus on the big fish that gives them the most bang for their buck.

    joelb, you are also overthinking this. Why open a Spanish bank account with Portuguese papers, thus triggering CRS reporting to Portugal? Why not just open a Portuguese account with Portuguese papers, Spanish with Spanish, Italian with Italian? CRS only applies to non-resident accounts. A Portuguese bank will not report a Portuguese resident anywhere.