Maintaining two tax residencies & CRS

[dash]

Hi.

I'm an EU citizen & tax resident of Switzerland. My sources of income are:
1) Full-time employment in Switzerland
2) Private investments (stocks, ETFs) -- dividends

I'm also thinking about buying some rental properties in Eastern Europe for extra income in a near future.

However, I want to stay living & working in Switzerland. I want to receive my salary from my Swiss employment and pay income taxes in Switzerland, but I would like to avoid the 35% tax on dividends in Switzerland (and possibly also rental tax in future).

I'm thinking about this strategy:
1) Get a tax residency in Panama
2) Open a brokerage account with IBKR and use my tax number (TIN) from Panama for the registration process
3) Tax my salary in Switzerland, but my private investment (dividends, capital gains, rent) in Panama

Is this setup feasible? Or am I missing something? Can I maintain two tax residencies like this in parallel and tax employment income in Switzerland and dividends income in Panama?

From my understanding, IBKR will send all tax information through CRS only to Panama, so the tax authority in Switzerland will not see my income from dividends.

 

[JackAlabama]

Hi.

I'm an EU citizen & tax resident of Switzerland. My sources of income are:
1) Full-time employment in Switzerland
2) Private investments (stocks, ETFs) -- dividends

I'm also thinking about buying some rental properties in Eastern Europe for extra income in a near future.

However, I want to stay living & working in Switzerland. I want to receive my salary from my Swiss employment and pay income taxes in Switzerland, but I would like to avoid the 35% tax on dividends in Switzerland (and possibly also rental tax in future).

I'm thinking about this strategy:
1) Get a tax residency in Panama
2) Open a brokerage account with IBKR and use my tax number (TIN) from Panama for the registration process
3) Tax my salary in Switzerland, but my private investment (dividends, capital gains, rent) in Panama

Is this setup feasible? Or am I missing something? Can I maintain two tax residencies like this in parallel and tax employment income in Switzerland and dividends income in Panama?

From my understanding, IBKR will send all tax information through CRS only to Panama, so the tax authority in Switzerland will not see my income from dividends.

Switzerland taxes everything. So you cannot legally shield that from Panama. You can get tax credits which you pay to Panama and have that deducted in Swiss if there was any kind of double tax treaty which there is none.

Will you get away with it in practice? Well... if CRS works as intended, is it legal? No
But you will not be able to use these funds back in Switzerland as they will ask questions if income does not match expense.

You can maintain how many residencies you want basically. Add thailand and paraguay to the mix and it will not change. If you ditch Switzerland, you would be more free.

 

[karishi]

Like Jack said above, it should work, but you will not be able to invest the money you generate. Like you can't use that money to buy a house in Eastern Europe, as you will need to explain where the funds come from or buy a car in Switzerland, or live a life above your Swiss salary. It all depends on how much money we are talking about, if it's small sums (10 to 20k a year), it can work, you can use them to pay for your holydays and buy things abroad.