Some questions on tax residency and companies

GrumpyMess

Building Trust
Entrepreneur
I have a several questions on different topics and instead of creating separate threads I decided to collect everything in one. Real cases are highly appreciated.

Residence
1. For example a person from a country A moves to a country B. How country B is treating his assets? Does he has to prove anything for these assets or he can use his previously obtained assets without any hassle?

2. A lot of sources claim that "tax residence" and "residence" are not the same. As I understand it is both true and not true at the same time, because a person can move to a country B, obtain a property, get a temporary/permanent residence card there and still not being a tax resident in that country. Is it enough for a country A or any other country to consider this person as a resident in a country B?

3. Are there any cases in the modern world in any country when the tax authorities leaked the taxpayer's data to the criminals? For example the person moves to the Thailand or Belize, where the level of corruption is very high, somehow the tax authorities find out that this person has high valued assets and extort these assets by any means.

Company
4. If a person owns a company in a jurisdiction which doesn't require to prepare an audited accounting, how the source of funds is proved if a person takes out the dividends? Does anybody care or a simple self signed form is enough?

5. The place of effective management. Are there any time-proven and inexpensive strategies to bypass this rule while not dealing with darks or nominee shareholders/directors?
 

KJK

Building Trust
Entrepreneur
This depends on what is country A, your home country, approach of the country will differ based on that.
 

Martin Everson

Offshore Consultant
Business Angel
Mentor Group
Residence
1. For example a person from a country A moves to a country B. How country B is treating his assets? Does he has to prove anything for these assets or he can use his previously obtained assets without any hassle?
In general there is no hassle if assets are already declared to country A. You see CRS reporting remember will reveal these assets to both countries if you move in middle of tax year and didn't report to country A so keep that in mind ;).

2. A lot of sources claim that "tax residence" and "residence" are not the same. As I understand it is both true and not true at the same time, because a person can move to a country B, obtain a property, get a temporary/permanent residence card there and still not being a tax resident in that country. Is it enough for a country A or any other country to consider this person as a resident in a country B?
Both are definitely not the same. One has to fulfil each countries tax residency requirements to be considered tax resident. One can have passive residency an stay less than 183 days for example and not be tax resident i.e Andorra. This type of residency is not enough for country A. The litmus test is can you obtain a tax ID from country B. This is all country A will care about.

3. Are there any cases in the modern world in any country when the tax authorities leaked the taxpayer's data to the criminals? For example the person moves to the Thailand or Belize, where the level of corruption is very high, somehow the tax authorities find out that this person has high valued assets and extort these assets by any means.
Yes the Swiss government broke their own secrecy laws via emergency measures put in place to provide US with 4,000 US account holders or UBS. German tax authority also received many leaked CD's of client data from Swiss banks for cash reward. Just google the cases. If it happens in Switzerland what you think will happen in a sh*thole Any bank will hand over info for right price..trust no one.

4. If a person owns a company in a jurisdiction which doesn't require to prepare an audited accounting, how the source of funds is proved if a person takes out the dividends? Does anybody care or a simple self signed form is enough?
Just because a country does not have a requirement does not mean that you shouldn't. A bank or tax authority may ask in future so always do audited accounting and don't wait to be asked by bank or taxman thu&¤#.

5. The place of effective management. Are there any time-proven and inexpensive strategies to bypass this rule while not dealing with darks or nominee shareholders/directors?
If you earn more than 800 euros a month then move country to non-CFC cheap country and live a happy free life. If you have commitments that mean you can't move then pay the taxes.
 

GrumpyMess

Building Trust
Entrepreneur
In general there is no hassle if assets are already declared to country A. You see CRS reporting remember will reveal these assets to both countries if you move in middle of tax year and didn't report to country A so keep that in mind ;).
The question is more for a country B, especially if country A is the territorial-tax country for which the declaration of these assets is not required.

Or the following case: country A, country B(no tax country) and the country С (western europe country). What will ask the country С for the previously obtained assets?

One can have passive residency an stay less than 183 days for example and not be tax resident i.e Andorra. This type of residency is not enough for country A. The litmus test is can you obtain a tax ID from country B. This is all country A will care about.
Often there is a possibility to obtain a tax number still being non resident, even in case of Andorra. Even more, there is UAE and Monaco which don't issue TINs.

Swiss government broke their own secrecy laws via emergency measures put in place to provide US with 4,000 US account holders or UBS. German tax authority also received many leaked CD's of client data from Swiss banks for cash reward. Just google the cases
It's the case for gov-gov interaction, I care more about corrupted tax office employees.

If you earn more than 800 euros a month then move country to non-CFC cheap country and live a happy free life. If you have commitments that mean you can't move then pay the taxes.
Are you talking about something like Georgia? Well, even in case of Georgia is not that easy, despite the fact that personal income arising from foreign sources is tax exempted it can be considered georgian-source because the work was done in Geogria and also a foreign corp can be considered as a georgian resident by the place of effective management. I know that these laws are not being enforced now, but it's quire risky to hope that it will be so also in the future and the taxes wouldn't be claimed retroactively.
 

Martin Everson

Offshore Consultant
Business Angel
Mentor Group
The question is more for a country B, especially if country A is the territorial-tax country for which the declaration of these assets is not required.

Or the following case: country A, country B(no tax country) and the country С (western europe country). What will ask the country С for the previously obtained assets?
Depends on country B and C rules.

Often there is a possibility to obtain a tax number still being non resident, even in case of Andorra. Even more, there is UAE and Monaco which don't issue TINs.
Yes but authorities use tables to know which countries issue TIN's and which don't so they won't expect one for countries you move to that don't issue them.

It's the case for gov-gov interaction, I care more about corrupted tax office employees.
You will find them everywhere.

Are you talking about something like Georgia?
No.
 

fshore

Trusted Member
Business Angel
I have a several questions on different topics and instead of creating separate threads I decided to collect everything in one. Real cases are highly appreciated.

Residence
1. For example a person from a country A moves to a country B. How country B is treating his assets? Does he has to prove anything for these assets or he can use his previously obtained assets without any hassle?

2. A lot of sources claim that "tax residence" and "residence" are not the same. As I understand it is both true and not true at the same time, because a person can move to a country B, obtain a property, get a temporary/permanent residence card there and still not being a tax resident in that country. Is it enough for a country A or any other country to consider this person as a resident in a country B?

3. Are there any cases in the modern world in any country when the tax authorities leaked the taxpayer's data to the criminals? For example the person moves to the Thailand or Belize, where the level of corruption is very high, somehow the tax authorities find out that this person has high valued assets and extort these assets by any means.

Company
4. If a person owns a company in a jurisdiction which doesn't require to prepare an audited accounting, how the source of funds is proved if a person takes out the dividends? Does anybody care or a simple self signed form is enough?

5. The place of effective management. Are there any time-proven and inexpensive strategies to bypass this rule while not dealing with darks or nominee shareholders/directors?
1 depends on the country. If country b has a wealth tax then you will have to start paying that based on those assets

2. Differ from country to country.

4. Depends who will ask, and the amounts. If you are not tax redident anywhere then the only that ask would be the bank, and it would depend on the bank.

5. Not that I'm aware of besides to hire a director and office in a cheap country.
 

GrumpyMess

Building Trust
Entrepreneur
If country b has a wealth tax then you will have to start paying that based on those assets
Let's assume this country hasn't wealth tax, a simple european country like Slovakia. I move to that country. Have I to declare my assets when filing the first declaration or wait until this country receives info under AEOI? What option will be next?
option 1. They simply check these assets were obtained before I became a tax resident there and no questions asked
option 2. They ask me to provide any evidence that these assets were obtained before getting a residency
option 3. They ask a lot of questions, require the source of funds and the proofs that tax has been paid on these assets, make requests to other tax authorities

Not that I'm aware of besides to hire a director and office in a cheap country
How much does it cost to you? Are you setting up bank, emi and other company accounts by the power of attorney from the director with the yearly renewal or just open them fully on your name as a company shareholder?

So what countries are you talking about? I have created a 3 circles diagram where 1 - the countries I'd like to live in, 2 - countries with zero tax or favorable tax regimes, 3 - the total setup cost and easiness of obtaining residency, and there are no or at least few intersections.
 
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