Strategy for Crypto offramp without taking lots of risks.

[CosmicSea]

Hi all,

What would you do in this situation:

Professional works for a foreign financial institution and makes salary plus comissions both paid in crypto.

At the time the professional was living in a fiscal hell country and don't declare all the income with the idea of moving to most suitable country.

Once he gets to the new country and has all setup and has six figures accumulated in crypto and more to come.

Taxation in the new country is 20% plus social security which is not horrible but still is not optimal.

what are the options to bring money to a bank without any risk and with low taxes?

The obvious answer is to make invoices and bring all the money but is not very tax efficient and also can cause some inspections due the quantities.

The second way is to ask for a loan in fiat and use crypto as colateral so borrowed money doesn't pay taxes and I can borrow at 8% at Nexo for example.

What do you think ?

 

[Martin Everson]

What do you think ?

Not what you want to hear but you should have declared all the crypto income if required to.

Any other solution now to legitimize the crypto is just money laundering sadly.

P.S Thats why I always say just relocate if you don't like taxes.

 

[Sols]

Over how long a period was the six figure crypto amount earned?

If it's one year, you could maybe sort things out by declaring the funds in your former country, pay the taxes owed, and from now only pay the 20% plus payroll tax where you live. There might be some late payment fees but those are usually trivial.

If it's multiple years, you have committed tax evasion. You can still work out a deal with the tax authority in your previous country. The penalties will be higher, but once you're done with it all, you'll have a clean source of wealth when future banks come asking questions about your money.

If you're dead set on adding money laundering to your tax evasion, you can of course use different schemes to drip the money into your pocket over a period of time. Chances are no one will ask questions if you do it slowly and carefully enough. On the other hand, if someone does, you may be in a position far worse than just sorting things out correctly.

Evading tax is a short-term benefit. The short-term is over.