Germany Exit Taxation - December 31st 2021 (EU ATAD Implementation)

[tsu458]

Crazy to think about it. Reminds me of communist east-germany you could not leave. But the minds of a lot of current politicans have been shaped there. So I'm not surprised.

 

[Martin Everson]

Yup they don't want you to escape the coming dystopia.

 

[kkein]

Tbh the trend seems alike all over the world.
With more power and means for the governments, citizens are increasingly treated like slaves.
I don't think there will be sustainable alternatives outside EU either.
States that offer advantageous regimes are typically small and in need of incoming capitals, but also weak and easy to crush by the hungry and greedy ones.
How long do you think UAE are going to stay like that?

 

[FixieHartmann]

So its come to the stage that EU countries are effectively trying to stop the rich from leaving . The final move they will enact is to ensure CRS report along nationality lines and not just residency. It's an easy enhancement to CRS and will help track capital gains owned but flush out those with fake residency.

P.S As I have said since 2017 - "get out of EU while you still can" .

I feel like this has been going on for quite a while. The EU is acting like a wife in a marriage that instead of trying to become more attractive to keep you will make divorce as painful as possible so that you feel like you are forced to stay.

My 'separation' from the EU certainly has been quite painful in terms of bureaucracy but I am glad that I am going through this process.

 

[FixieHartmann]

Crazy to think about it. Reminds me of communist east-germany you could not leave. But the minds of a lot of current politicans have been shaped there. So I'm not surprised.

And what's interesting is that none of the politicians think of themselves as 'bad'. They are all convinced that the measures that they are implementing are generally for the greater good.

 

[backpacker]

The final move they will enact is to ensure CRS report along nationality lines and not just residency.

What you suggest as "final move" was actually a very early proposal. At the time I was very surprised that they did not pick up on it.

A first-mover in citizenship based taxation must be a country where the constitution does not contradict such a move (examples of limited reach: countries where only residents can receive a COVID vaccine ; or only resident citizens are allowed to vote ; or only citizens are allowed to vote up to certain time after they have left their home country ).
Since governments do not want to make it more complicated for themselves then it already is, they will simply come up with a citizenship based taxation on compatriots who left within the past three years (or a similar narrow time frame). That way they can still catch "tax refugees" and -of course- prevent future generations from leaving .

 

[FixieHartmann]

Yup they don't want you to escape the coming dystopia.

My theory is that for instance in Germany politicians know that the social security system will collapse in the future. They are not stupid. There are lots and lots of calculations that clearly indicate that the current setup will not work for future generations. At the same time they know that rich people and companies are the biggest contributors to these funds. So it is only logical to make it as hard as possible for these people to leave to delay the collapse as long as possible (preferably to when they are dead or at least retired).

I can imagine that in the short-term (10-20 years) this approach actually works quite well. However it causes huge problems in the long-term because these measures will lead young, intelligent and motivated people to move somewhere else to build their dreams.

 

[Fred]

How long do you think UAE are going to stay like that?

Nobody knows - right the wave till the end.

From living fulltime in the UAE I can confirm that no rumors are going on that something changes soon - it's exactly the opposite more things will be introduced soon to support the business culture further in the UAE.

 

[FixieHartmann]

What you suggest as "final move" was actually a very early proposal. At the time I was very surprised that they did not pick up on it.

A first-mover in citizenship based taxation must be a country where the constitution does not contradict such a move (examples of limited reach: countries where only residents can receive a COVID vaccine ; or only resident citizens are allowed to vote ; or only citizens are allowed to vote up to certain time after they have left their home country ).
Since governments do not want to make it more complicated for themselves then it already is, they will simply come up with a citizenship based taxation on compatriots who left within the past three years (or a similar narrow time frame). That way they can still catch "tax refugees" and -of course- prevent future generations from leaving .

I am pretty sure that this is what will happen in the next years.

1. CRS reportings will be extended to residency *and* citizenship.
2. More and more countries will give themselves the right to tax their citizens if they don't live in countries with DTAs.
3. High tax countries will generally question the legitimacy of companies in zero tax jurisdictions, e.g. you can't claim invoices from companies in these countries for tax purposes and WHT for payments to tax havens will become more strict.

My theory is that in 10-15 years you will only be able to live (income) tax free if
- you don't have citizenship in any high tax country
- live in a low / zero tax country (of which there will be less and less)
- rely completely on passive income and don't work

 

[JustAnotherNomad]

It's already happening. The smart, young people are leaving the EU in droves. Maybe some people still stay if they foresee a great corporate career, but almost all smart, young people I talk to have either already left, or they are strongly thinking about leaving. Normal, everyday people, who usually wouldn't thinking about tax optimization.

 

[FixieHartmann]

It's already happening. The smart, young people are leaving the EU in droves. Maybe some people still stay if they foresee a great corporate career, but almost all smart, young people I talk to have either already left, or they are strongly thinking about leaving. Normal, everyday people, who usually wouldn't thinking about tax optimization.

Same here! Of course we have to consider that we usually hang out with people that are similar to us, so there definitely is a bias. Nevertheless I feel the same, more and more people that have the option are looking to leave the EU.

 

[Martin Everson]

And what's interesting is that none of the politicians think of themselves as 'bad'. They are all convinced that the measures that they are implementing are generally for the greater good.

Thats exactly what the Nazi's thought and we know how that ended

 

[Martin Everson]

I think if EU countries can stop the rich from escaping then they will massively increase income taxes.

It's not too long ago in 2012 when the French president introduced a tax rate of 75% . This applied to earnings over 1m euros but was dropped in 2014 as it failed to achieve its goals as people ran away or restructured their income. I would not put it past France to re-introduce this tax rate or another EU state to re-introduce such a tax rates again if they can stop the wealthy from escaping beforehand .

 

[JackAlabama]

Tbh the trend seems alike all over the world.
With more power and means for the governments, citizens are increasingly treated like slaves.
I don't think there will be sustainable alternatives outside EU either.
States that offer advantageous regimes are typically small and in need of incoming capitals, but also weak and easy to crush by the hungry and greedy ones.
How long do you think UAE are going to stay like that?

The trend is there for sure as you correctly say. Taken game theory into account, it will also exponentially increase the incentives for going against that trend and actually be attractive to globally mobile people. So I'd conclude there will always be some places which are good at any given times. If they work for ones individual situation is another story.

Also EU will soon have to focus more on internal issues if current protest waves keep growing and will have less time to bother far away places.

I think if EU countries can stop the rich from escaping then they will massively increase income taxes.

It's not too long ago in 2012 when the French president introduced a tax rate of 75% . This applied to earnings over 1m euros but was dropped in 2014 as it failed to achieve its goals as people ran away or restructured their income. I would not put it past France to re-introduce this tax rate or another EU state to re-introduce such a tax rates again if they can stop the wealthy from escaping beforehand .

It seems Spain became creative and found a new way. Sounds a little bit concerning to me.

"All adults will be required to provide “personal services” to the state if a crisis is ever declared in Spain, according to the reform of the National Security Law being prepared by the government."

"What’s more, it is the prime minister – not the Congress of Deputies – who is responsible for declaring a situation “of interest to national security,” i.e. a state of crisis. This is done by royal decree and the decision is then immediately communicated to Congress and the Senate."

"The document adds that business and legal entities will also be required to work with authorities to overcome the crisis, whether materially or by providing services. Media communication companies must also work with the relevant authorities to publish information aimed at preventing the crisis or serving an operational purpose."

Spain drafts legal reform allowing state to mobilize all adults in times of crisis

The changes to the National Security Law, which incorporates lessons from the coronavirus pandemic, would also let the government requisition private assets and suspend activity

english.elpais.com

 

[troubled soul]

For Online Business, Which can be run from any where,
It is better to move to low tax or tax free country.
As example,
If you are earning high AdSense income ,
In some cases Tax will be more than 50% (income tax + VAT ). It looks like day light robbery. Better to move and save half income.
30-35% income tax rate is Viable , anything above is robbery. It can not sustain in any country. People will move out of that country.

Sometimes , I thought Why all government in the world abolish the income tax and survive on the VAT /Service Tax/
Or only Transaction Tax.
I started new thread for this discussion you can follow here

Why all government in the world abolish the income tax and survive on the VAT /Service Tax Or only Transaction Tax ?

In recent time there are so many controversy and discussion about the Personal Income tax. billionaire does not paid tax honestly this and that . Sometime I thought "Why do not government abolish the income tax and just earn from service tax or vat tax "transaction Tax" ?" As Example , Just...

www.offshorecorptalk.com

 

[FixieHartmann]

The trend is there for sure as you correctly say. Taken game theory into account, it will also exponentially increase the incentives for going against that trend and actually be attractive to globally mobile people. So I'd conclude there will always be some places which are good at any given times. If they work for ones individual situation is another story.

Also EU will soon have to focus more on internal issues if current protest waves keep growing and will have less time to bother far away places.



It seems Spain became creative and found a new way. Sounds a little bit concerning to me.

"All adults will be required to provide “personal services” to the state if a crisis is ever declared in Spain, according to the reform of the National Security Law being prepared by the government."

"What’s more, it is the prime minister – not the Congress of Deputies – who is responsible for declaring a situation “of interest to national security,” i.e. a state of crisis. This is done by royal decree and the decision is then immediately communicated to Congress and the Senate."

"The document adds that business and legal entities will also be required to work with authorities to overcome the crisis, whether materially or by providing services. Media communication companies must also work with the relevant authorities to publish information aimed at preventing the crisis or serving an operational purpose."

Spain drafts legal reform allowing state to mobilize all adults in times of crisis

The changes to the National Security Law, which incorporates lessons from the coronavirus pandemic, would also let the government requisition private assets and suspend activity

english.elpais.com

Are you from Spain / familiar with the country? Because that sounds *very* troublesome and maybe we are misinterpreting it?

 

[countpinky]

I think if EU countries can stop the rich from escaping then they will massively increase income taxes.

It's not too long ago in 2012 when the French president introduced a tax rate of 75% . This applied to earnings over 1m euros but was dropped in 2014 as it failed to achieve its goals as people ran away or restructured their income. I would not put it past France to re-introduce this tax rate or another EU state to re-introduce such a tax rates again if they can stop the wealthy from escaping beforehand .

Then there will be no incentive to be wealthy.
You vill own nothing and you vill be happy

 

[backpacker]

Then there will be no incentive to be wealthy.
You vill own nothing and you vill be happy

That's the idea of it. It is all for our safety and for the overall greater good.
Rest assured, most of the population will like it. As they like COVID restrictions, mask mandates, high taxes (they are necessary to build all these beautiful schools, kindergardens and hospitals), garbage separation in five different coloured bins, waste-water fees, mandatory liability insurance ..... .
They love the government taking care of every aspect of their life. Since the majority of the electorate is brain-dead anyway nobody of these "dumbsters" even notices that former democracies are currently successfully transforming into authoritarianism.
Take the European Union: Young voters love authoritarian Bruxelles! Why? Because it takes care that youngsters do not need to pay evil roaming fees when calling Mama while being on vacation in Mallorca.

 

[JackAlabama]

Are you from Spain / familiar with the country? Because that sounds *very* troublesome and maybe we are misinterpreting it?

Yup, *familiar with the country* and a burned investor in its tourism sector

 

[Vor]

So funny I think my US passport is a pain in the a*s(it is) but in the future so will every US,CA,EU passport lol.