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Hi guys,

I just have a blunt question: what are the chances of getting caught underreporting/not reporting one’s taxes in EU countries?

I know it sounds pretty stupid to ask, and I am expecting most people will say that it’s not advisable and that “one day you’ll get caught”, but realistically what are the chances?

The reason I am asking is because it seems impossible to measure the risk since on one hand some people will say that you’ll get caught one day or another, and on the other hand I have personally witnessed people conceding income from tax authorities in developed European countries (Germany, France) and get away with it (some people doing it for 7-10years).

I am not talking big money here but rather low 6 figure incomes and I am just curious to see if you guys had any tangible feedback on this topic.

Thanks
In most of the countries it is pretty normal that the sanction will arrive after many years, just a couple of months before the statute limitations time expired... and if the amount of tax is high enough in some countries it could reach even 12 years in case if tax crimes... so maybe in those cases after 11 years the guy would have a bad surprise...

Nowadays with CRS, before or later, it is highly probable they will check on that....
 

ufnio

New member
In Norway the leeches take notes of registration plates outside malls, and then extort you if you DARE use the company car to stop & do some shopping on the way back home from a job............

The insanity of it all is endless, and of course the huge scope of what they try to control makes it dead easy to hide in the big data ;-)

But of course they end up killing ALL real businesses, leaving the corps & the state to run the whole show...

Corpocommunism? I've been searching for a while for the right term!
That´s very interesting. 1984. I´ve never lived in Norway, but it seems like most western countries will follow suit. My conclusion is to reduce car and property ownership. Typical examples of wealth to tax man. Third world countries could benefit from an influx of wealthy immigrants.
I´ve never been to Thailand. Do they suffer from food raising prices caused by wealthy immigration, like in Costa Rica?
 

GenevaDude

New member
Oh and I thought Norway is the dream country everyone aspires to be, everyone is basically a millionaire thanks to the national oil pension fund, right?
Or maybe I'm missing the other stuff like 45% tax burden, publicly available tax records, social justice warriors in Barnevernet, and all sorts of other weird things. The only good thing is probably not being member of the EU and not using the euro.

Seems to be a trend now, in the past it was a few billionaires here and there fleeing - like the shipping magnate Fredriksen renouncing Norwegian citizenship and becoming Cypriot. Now it is even middle class and various companies. You notice that in the US as well - Joe Rogan, Elon Musk, Oracle - all of them fleeing California to Texas.


This is not an "wow, it's even reverse" situation. This is a standard situation in 90%+ of countries I imagine. In criminal proceedings presumption of innocence should apply (unless you're North Korea). In civil and administrative proceedings presumption of guilt applies.



Anyways the question of the OP goes down to the actual enforceability of a law. There are intellectual property rights but how will they be enforced when I download a Netflix series via Bittorrent? There is a law that I can't transfer 10k abroad without declaring, how will that be enforced when I take crypto with me? There are absurd laws related to Covid-19 right now, from wearing face masks in forests to shutting down restaurants, how long will countries try to enforce this before people start operating speakeasies just like in the 1920s?

It is the same with taxes - noone, literally noone pays taxes e.g. in Greece and Italy if they have even the slightest opportunity not to do so. Extremely easy if you worked in tourism on an island (now of course you got hit with covid), very easy if you're a digital nomad, still easy if you're a corporation that can hire a big-4 consultant to find a good structure for you. Not possible if you're a state employee or even just a regular employee in a corporation.


Not all transactions / incoming transfers qualify as income. If the "tax representatives" (I have doubts if that is the correct term lol...) had to go after every person with high turnover on the account, they would go crazy and be ineffective. There is a higher chance they will be triggered by your ex-wife, envious neighbour or some shady activity associated with you.


The goal, at least for now, is not to check everyone's income and all their accounts and all transfers to the last cent. The goal of the heavily taxed countries is to keep the system running and people compliant and scared as much as possible. That is why the tax office is actually MORE likely to go after moms dropshipping stuff on local eBay without licence and without paying taxes - rather than going after a digital nomad with a higher turnover.

Someone following the flag theory is a much more difficult target - even with stuff like spying and CRS. At the very least live in country other than your citizenship, have company in country other than where you live - then add additional stuff like good banking, good company structure, perhaps second citizenship if that helps you. Be two steps ahead - then there will be thousands of much easier targets than you. And as the saying goes - you don't need to be faster than the lion, you just need to be faster than the other zebra.
Hello, I am new to the forum. And have a question about leaving in a country other than one's citizenship and having company in another. Is it always efficient? I am battling an idea on living in France and having a company in France too. I would like to have an off-shore one. But a french tax lawyer told me I have no other choice as by law I must register a company in France if I live here. Is it the case?
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
And have a question about leaving in a country other than one's citizenship and having company in another. Is it always efficient?

Depends on many many factors

I would like to have an off-shore one. But a french tax lawyer told me I have no other choice as by law I must register a company in France if I live here. Is it the case?

Get a new tax lawyer.
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
Clear. How do I screen them, though? You never know which one are you going to consult with? And this is the second one telling me the same thing.

Maybe your not explaining the full advice given by tax advisors or somethings lost in translation. By register maybe they mean inform the French taxman and pay taxes in France due to CFC and PE rules but I speculate. Seek another opinion from one of the big 4 firms i.e PWC, KPMG, EY or Deloitte.
 

GenevaDude

New member
Maybe your not explaining the full advice given by tax advisors or somethings lost in translation. By register maybe they mean inform the French taxman and pay taxes in France due to CFC and PE rules but I speculate. Seek another opinion from one of the big 4 firms i.e PWC, KPMG, EY or Deloitte.
Consultations were in English, so translation is not the case. Yes, informing the French Tax authorities is obligatory regardless where is your company or what you do in life, really. I've mentioned that.

The question was is it compulsory to establish a French entity if one is living and running business from France and is UBO? Or, can I only have an off-shore business, run it from France and pay whatever taxes they want me to for the first years until it is worth reconsidering structure due to increase in profits.

I will try to contact one of Big 4. Good idea - thank you. Do you know which one is best recommended for France?
 

kkein

Entrepreneur
In Norway the leeches take notes of registration plates outside malls, and then extort you if you DARE use the company car to stop & do some shopping on the way back home from a job............

The insanity of it all is endless, and of course the huge scope of what they try to control makes it dead easy to hide in the big data ;-)

But of course they end up killing ALL real businesses, leaving the corps & the state to run the whole show...

Corpocommunism? I've been searching for a while for the right term!
You should watch Rollerball, mate!
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
I will try to contact one of Big 4. Good idea - thank you. Do you know which one is best recommended for France?

All are good for France.
 

avalanche

Entrepreneur
Your example of Khalil is more a case for the National Crime Agency, not HMRC.

I agree with @Martin Everson. What sophisticated software is the government going to use for Dave the Gardener who gets paid for 50% of jobs in cash which he uses to pay for his weekly shopping, a few pints and the rest goes under his mattress? Cash in some countries is still so widespread (thankfully) that is impossible to police, it's constantly moving from person to person.
You will end up with a pile of cash that you cannot use for anything other than buying groceries and household items
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
You will end up with a pile of cash that you cannot use for anything other than buying groceries and household items

For some that is good enough to have a happy carefree life.
 

Golden Fleece

Entrepreneur
Actually downloaded it last year, still lying around on my harddrive... Will do, once I get another bottle of wine to go with it!
Be sure to watch the original "Rollerball" with James Caan (1975), not the remake. It has a totalitarian political component to it.

BTW: As an American, "Das Boot" is my favorite foreign film of all time. I try to watch the director's cut version every few years.
 

Dasboot

Active Member
Be sure to watch the original "Rollerball" with James Caan (1975), not the remake. It has a totalitarian political component to it.

BTW: As an American, "Das Boot" is my favorite foreign film of all time. I try to watch the director's cut version every few years.
I started using that as a nick when I got my first crypto in January 2018, I both knew I'd lose & told everyone that this was "learning money" :)

Fast forward to now & I've around doubled my assets, after a few deep dives & lots of learning hehe
 

Admin

Forum Moderator
Staff member
For some that is good enough to have a happy carefree life.
I agree, most often the world is not black and white and cash will always find it's way to buy you what you want.

Maybe there will come a day where we all will only have digital coins and no real money any longer, once that day comes, Gold & Diamonds will still be possible payment methods.
 

azb1

Entrepreneur
I agree, most often the world is not black and white and cash will always find it's way to buy you what you want.

Maybe there will come a day where we all will only have digital coins and no real money any longer, once that day comes, Gold & Diamonds will still be possible payment methods.
Crypto replacing the CASH.
 
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