If you own US company as a developing country citizen+resident, what happens if you pay no taxes?

[howyoudoin]

The country in question is Tarkay. Replace first a to u, second a to e.

Business is completely legal and does all the required filings for the US. Most clients are from US, some are EU. No earnings are generated from the country in question.

Most of company earnings in the company account would be sent to personal bank accounts in various countries to keep safely, since future of the said country doesn't seem bright considering what happened to the countries nearby in the last 15 years. A small percentage of the earnings would be sent to personal account in the said country for life expenses, but I think one can use EU/US debit/credit cards too.

Would the taxman knock on your door a decade later when/if you have enough money?
I've read here that a Dutch didn't pay taxes locally for his US company and they took his assets and he still owes 1M to them.

Part of me thinks they have no resource to figure out you paid no tax. Other part of me thinks it takes only a SQL query.

I imagine other governments could ask for your tax return documents for the said country, if you apply for their residency/citizenship? Or maybe some banks could ask for such documents. If you can't provide such documents, banks could claim your funds? I'm thinking decades, and I think its a good idea to think of decades, since if you can't protect your money, what's the point?

 

[joseph15]

Well, according to this link the "country in question" has a CRS automatic agreement with only 2 countries currently. The US also supposedly only reports automatically under certain conditions. From a general birds-eye-view, I would think you are pretty safe from automatic sharing of information.

If your country's tax authority is suspicious of you having money (you buy houses, cars, etc.) then you are right and it won't be that hard for them to find out about your offshore money, especially if you use foreign debit cards and have incoming wires from foreign banks. Pretty much all countries share information when asked by a tax authority these days, so the best thing to do for you would be to live a lowkey lifestyle I guess..

I will say this though - the country you mentioned is not one where I will want to be caught doing anything against the law

 

[howyoudoin]

Well, according to this link the "country in question" has a CRS automatic agreement with only 2 countries currently. The US also supposedly only reports automatically under certain conditions. From a general birds-eye-view, I would think you are pretty safe from automatic sharing of information.

If your country's tax authority is suspicious of you having money (you buy houses, cars, etc.) then you are right and it won't be that hard for them to find out about your offshore money, especially if you use foreign debit cards and have incoming wires from foreign banks. Pretty much all countries share information when asked by a tax authority these days, so the best thing to do for you would be to live a lowkey lifestyle I guess..

Thanks for answering. I think I should share more information. There has been 9 tax amnesties in last 16 years in the said country. Here's how it works. Your company registered in the said country avoid paying taxes to the government. Basically you empty the company bank account to your personal account. Normally you owe the government 30-45% on that but you pay nothing and you wait. When the government rolls out a tax amnesty, you pay the government 5-10% and the government forgives you breaking the law and even promises to not look into your books for the last 5 years.

Also, many if not most mid to small companies fabricate bills for write off. It's almost a standard practice. People in the government publicly steal from the people. Considering all that paying taxes here would make you feel like an idiot, especially if whole business is operated out of the country, online. Of course taxman doesn't care about your feelings and bullies, govt, take your money if they can. I wish there was someone from the said country here who can offer some insights.

I will say this though - the country you mentioned is not one where I will want to be caught doing anything against the law

Could you elaborate?

Safest way to make this work long-term would be establishing residency in Georgia, I imagine. AFAIK tax residency = residency.

Found this on Google: "For tax purposes an individual is considered resident if his legal residence is in Tarkay or if he stays in Tarkey uninterruptedly for more than six months in a calendar year." So, you could fly every 6 months and be safe.

 

[howyoudoin]

Anyone else has any feedback about not paying taxes to the said country? I'd appreciate it

 

[Gediminas]

Most of the countries have a statute of limitation periods (tax recalculation deadlines) which varies from 3 to 6 years. However, in most cases these deadlines do not apply in case of tax inspectors also initiate criminal charges. Therefore it is extremely important to plan your taxes in the way that the structure you choose in the worst case would be subject to discussion with tax inspector but not cause criminal investigation. As a general rule, the main principle which helps to separate tax liability from criminal liability is whether your structure is overall “defendable” or not. “Defendable” means that you can submit your arguments to the tax inspector and they would be seriously considered, maybe the structure is within the grey zone, but not a completely black zone.

I definitely agree with you that you need to have a tax and asset protection strategy for decades not for years. The important aspects as regards this strategy is your tax residency country and your flexibility to work with this question, also how much money you can spend for possible asset protection and tax optimization vehicle. Such structures as foundations (for example in Liechtenstein) if properly structured might solve a lot of questions, also private label funds, special life insurance solutions and many more.

 

[howyoudoin]

Most of the countries have a statute of limitation periods (tax recalculation deadlines) which varies from 3 to 6 years. However, in most cases these deadlines do not apply in case of tax inspectors also initiate criminal charges. Therefore it is extremely important to plan your taxes in the way that the structure you choose in the worst case would be subject to discussion with tax inspector but not cause criminal investigation. As a general rule, the main principle which helps to separate tax liability from criminal liability is whether your structure is overall “defendable” or not. “Defendable” means that you can submit your arguments to the tax inspector and they would be seriously considered, maybe the structure is within the grey zone, but not a completely black zone.

I definitely agree with you that you need to have a tax and asset protection strategy for decades not for years. The important aspects as regards this strategy is your tax residency country and your flexibility to work with this question, also how much money you can spend for possible asset protection and tax optimization vehicle. Such structures as foundations (for example in Liechtenstein) if properly structured might solve a lot of questions, also private label funds, special life insurance solutions and many more.

Thank you. Can I learn more about your 2nd citizenship service? Do you happen to have Telegram?

 

[Gediminas]

Thank you. Can I learn more about your 2nd citizenship service? Do you happen to have Telegram?

No I don't use Telegram, but I have PM'd you.

 

[CaLViN]

Hello,
What i know is that you can have a company in acountry outside somewhere different from your tax resident country and pay taxes out there.
As long as you dont bring your money in to Tarkay(what a sick name is this )) ) via debit cards or wire transfers,you will be safe as you earn outside and pay taxes outside.
This is the strategy you should keep tracking.
I assume you dont earn billions of dollars and not a terorist or gun seller.If you are ,then Tarkay (sickest name in the world. ) might bust you suddenly! (ansızın bir gece)

 

[zeytin]

In your country, you can fly under the radar if you don't bring too much money. However, I must warn you, some banks in Turkey do due diligence very hard (TEB and Enpara/QNB Finansbank for example) and they call you and ask you the source of funds if it's sent from a company and not your personal offshore account in your name.

They can only question your last 5 years for tax so 10 years would be impossible. Timeout in tax-related stuff is 5 years. They also welcome any money as long as you buy something, they can't ask you source of funds. Problem is brining money from overseas and you should use debit card to the fullest extent if you want to avoid any troubles

 

[rowena]

@howyoudoin
If you have money outside the country, why don't you just use the amnesty? It is extended until 07.2020. Just pay %1 and all problems are gone.

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