Excellent info. Thank you Michael.

@OffshoreCitizen

2 жыл бұрын

Always our pleasure! Are you a digital nomad?😄

Good content, thank you. Consider a video that encompasses low tax countries 3 to 15% for business and personal. How a tax shelf rate is 10% but by doing X the effective rate is 5%. Leaving the US allows us to "take the savings" pay for restructuring, moving, and renouncing.

As a tax attorney, I agree wholeheartedly with this analysis. Legally, you are more likely than not on the hook for local source income absent a tax treaty or specific terms of the visa, but from a practical perspective how would one determine what income is or is not local source, and can you really say that a guy writing a blog article on a desk in a hotel constitutes "an office" or a "fixed place of business" even in the most generous reading of a tax treaty, does the person doing the same from an apartment they rented constitute such an "fixed place of business" or would the OECD model rules that most countries apply even absent a treaty say that makes for a permanent establishment? In the presence of a tax treaty should a term that says being in XYZ for more than X number of days or months via employees - the company didn't rent out office space or pay for that hotel- how could that possibly be a "fixed place of business?" Does that constitute a permanent establishment even under a treaty? I mean sourcing income is murky even with a treaty. Throw in entities, or entities that already deploy a multinational structure with clear cut permanent establishments where employees do work, and what is or is not local sourced income becomes even more murky - especially for the sole shareholder or member of a entity who is traveling and doing work on the road. Now let's consider the nature of that work, I mean under a lot of tax treaties buying goods or procuring storage for goods or research or information gathering or work of an ancillary or preparatory nature doesn't make for a permanent establishment. Right? I have been looking at the US-Portugal Tax Treaty and the Portugal-UAE Tax Treaty closely and even upon a close reading of the treaties, and a very careful structuring of operations, I don't know that I could tell you what would or what would not necessarily trigger taxation of the entity in Portugal. I mean if the owner of a Wyoming LLC that owned a Dubai FZE which was treated as a pass through entity for US tax purposes, and the employees of the company that did all of the service work of the company were in Dubai, and the owner of that Wyoming LLC had two US resident directors who enjoyed their paid vacation to Florida each Christmas for a board meeting of both the Wyoming LLC and the Dubai FZE with a nice per diem and obviously plane tickets to and from the meeting, and that US citizen owner also attended the Florida management meeting as a director, does his presence in Portugal create a permanent establishment for the companies if he is there 9 months out of the year? Does that hold true if he takes a vacation for 2 months out of the year while he is in Portugal and does no work? Does his desk in his apartment that he rents where he creates articles for the company's website constitute a permanent establishment? Does it matter that he retains ownership to the copyrights over those articles and that he is paid no salary for the articles? What if he is paid a royalty of X percentage of the advertising and affiliate marketing commissions the website generates as the author who owns those copyrights? What if he IS paid a salary by the companies, but only when is is in Dubai working for the company 3 months out of the year, or his director's fee in the US? What if the Wyoming LLC owns a Portuguese company that pays him a salary for specific tasks he performs in Portugal? Even though the treaty states that owning an entity in countries of either contracting state doesn't make for a permanent establishment, does it constitute a permanent establishment anyway? How do you properly evaluate the value of the chief executive of a company under a transfer pricing agreement? Is the sole shareholder living the majority of his time in Portugal a resident of Portugal, or the US when he has a home in the US and he visits it routinely -although less than 30 days a year in the US? Is it a habitual abode? What if all of his family resides in the US and no one, but him in Portugal. What if all of the business bank accounts are in the US, or the UAE? What if the UAE entity shows no profit and only expenses for employees living and working in the UAE? What if there is no entity owned in Portugal, and the owner recieves no salary in Portugal, but is paid the royalty and dividends from the Wyoming LLC taxed as an S-Corp. Is the UAE entity a blacklist company despite being a pass-through entity subject to tax in the USA? Does the fact that the Portugal-UAE Treaty and the US-Portugal Treaty would potentially make the company a US company matter? Is management and control a board meeting or is it the day to day stuff that the owner does? How does the owner prove he only writes articles for the website & those are as an independent licensor of content to the company in other words self-employment? Is the contract dispositive, and the fact that he is not paid a salary in Portugal? Is the royalty income self-employment income in Portugal under the NHR or is it royalty income? The US has a social security totalization agreement with Portugal, is the "self-employment" income ie the royalty payments to the owner from the US subject to US social security tax as self-employment income? Is it subject to Portuguese social security tax instead? Is the salary paid to the owner as a director of the S-Corp for the board meeting subject to US social security? Is the salary paid by the UAE FZE to the owner in Dubai subject to Portuguese social security payments under any totalization agreement? Is the payment of a salary by the UAE company subject to blacklist treatment in Portugal under the NHR -what impact does any income or expense in the UAE as a backlist country have on tax treatment in Portugal under the NHR or even not under the NHR? Even with treaties this stuff becomes complicated. Does it matter if the Wyoming LLC registers as a branch in the UAE, but not in Portugal? What if the Wyoming company pays the salary for UAE work? Does that effect treatment as blacklist income or not? Is there a scenario where it makes more sense in terms of taxes to set-up a Portuguese subsidiary that does a substantial part of the work pay some taxes in Portugal and treat it as a pass through entity in the US to reduce US taxes via tax credits for the company as a whole? Do transfer pricing studies add too much to the cost to make any such scenario worthwhile? If I am reading the treaties as favorably as they can be interpreted I can see a scenario where there is no permanent establishment for either the UAE or the US company in Portugal with the US citizen owner living 9 months out of the year in Portugal. What does the fact that the tie-breaker provisions regarding entities in the US treaty state the contracting States will settle the issue by mutual agreement? What does it mean that the place of effective management settles the Issue for the UAE treaty, the US doesn't recognize place of effective management, but only place of incorporation? What does it matter then that the company is managed in the US? What does it matter that it is a disregarded entity in the US, does that mean the US argues the UAE company is a US tax resident? What does the fact that the US tie-breaker provision says if the parties can't agree the treaty will apply to no one? Now here is the bigger wrinkle, what if it isn't an S-Corp, but a disregarded entity in the US completely, and therefore 100% of the income is self-employment income as far as the US is concerned and there is no entity? What does that mean for the income in Portugal? Does Portugal treat the entities as if they exist even if they don't for US tax purposes? What if the US citizen taxpayer treats all of the income and expenses as self-employment income in Portugal, do the entities matter?

@Timithos

2 жыл бұрын

Are you sure you're an attorney, because that a lot of questions. We seek attorneys because they are supposed to have the answers.

@OffshoreCitizen

2 жыл бұрын

Some of these questions are fairly easy to answer but yes there's huge uncertainty, signs of sloppy drafting of laws. The good news is in most cases you can avoid having to answer these things

@jeremyleonbarlow

2 жыл бұрын

@@Timithos in the old John Houseman film The Paper Chase, he talks about law school teaching you how to think like a lawyer. I was literally walking through the list of what ifs I would think about in terms of how to go about structuring a company and the transactions surrounding a business to fall under the protections of a treaty. A fair amount of tax law & double tax treaties are written to create uncertainty in favor of the taxing authority. When it comes to a significant portion of international strategies you come up with the best possible plan and narrowly tailor it to fit the carve outs, but there are more than a few times that the answer will be there is no definitive answer; however, if you want to deploy this strategy your best bet for favorble treatment is to do it in this specific manner. If you want a definite answer, before you do XYZ, apply to the tax authorities in the countries in question for a private letter ruling or similar pre-determination on the strategy if such a process exists to confirm the analysis. There are scenarios that you don't necessarily pre-plan for that you offer a best guess on after the fact. I mean does the fact that the CEO of a company with no operations in Malaysia had to get on a phone call with the board of directors mostly in Berlin after a major catastrophe happened to deal with the fallout while he was on vacation make the company tax resident in Malaysia? Under the laws of Malaysia it could if he is a board member, but did it? Probably not, but Malaysia might beg to differ. Now what percentage of the value of the company's income is subject to tax on Malaysia for that year when the tax authority there decides it was managed and controlled from Malaysia is attributable to the value that phone call created as it was the only operation in Malaysia and they have a territorial tax? It could be almost zero, but what if the CEO's reaction to a catastrophic event for the company turned what should have been a $5 million loss into a $30 million gain? In that scenario, you are paying a tax attorney not just for the thought process and ability to give you a possible answer, but also the fact that a good lawyer will argue if the people back in the company's home country where all of the operations are didn't execute that decision just right it could have still been a $5 million loss when they are appearing in tax court.

I constantly ask myself the same question, but especially: can I avoid paying taxes? Still, everyone tells me to set base somewhere and that’s where I should pay.

@OffshoreCitizen

2 жыл бұрын

Have you seen this video kzread.info/dash/bejne/qH6qwdKomNm_m5c.html ?😄

@berndfreudinger8754

2 жыл бұрын

That's correct, because people with US citizenship always pay Tax in USA, in every case the federal tax in IRS ⚖️

Thank you Michael, I've just subscribed to your channel. Much of the discussion seems centered on travel while earning active income. (ie-digital nomad) Am I correct in understanding that a Canadian retiree earning Canadian-source pension and Canadian-source investment income, while travelling constantly and spending at most, a couple of months anywhere, would file in Canada? We have no residence in Canada (use our son's address for mail, etc) and would spend less than two months a year in Canada. Would we file a regular tax return or be subject to witholding tax on investment and pension income? If we file a regular tax return in Canada, is it only a Federal return or is there some provision for Provincial as well? Thanks very much

what about bank accounts? Would that not trigger tax questions eg if i have uk bank account and constantly bouncing around Asia can I withdraw all my earnings to uk bank ? And not pay uk tax?

I notice you dont talk much about Armenia this is a little off topic But it seems they have similar tax rule when it comes to securities trading as Cyprus (not taxable income) but can't confirm. Do you have any insights about this?

When you Leave Australia and become a Non Resident for tax purposes can you still have a SMSF operating in Australia for up to 2 years?

Great video, as always. One issue I’m having is actually finding any information regarding digital nomad visas published by the government themselves. Specifically Croatia or Greece. Anyone I’ve contacted has palmed me off rather than pointing me in the right direction.

@OffshoreCitizen

2 жыл бұрын

You can always book a call with me and I'll be happy to guide you on the best solution and any next steps, based on your specific situation calendly.com/michael-rosmer

@GM-je3zp

2 жыл бұрын

sounds like typical Greek stuff

I see your videos pop up on my homepage and I want to hit subscribe again (but I'm already subbed)! lol thank you! Video Idea: Which bank accounts can non-residents use? e.g. can a UK citizen (but non-resident) use their UK bank account to receive capital gains?

@OffshoreCitizen

2 жыл бұрын

Thanks for the suggestion and your support, appreciate it!🙏 How did you like this video?

Thank you for addressing the topic of tax treaties 👍. If I did not misunderstood, tax treaties are not really that important when choosing a tax residency, as long as your source of income is not location dependent (example:online consultancy) and you don't remain for too long in a given country, right? Thank you

@OffshoreCitizen

2 жыл бұрын

Hmm it depends. Often tax treaties don't matter it depends on the need for tie breakers and on the types and source of the income

what happens when you spend six months each in two different countries? eg May 1-Oct 31 in one country and Nov 1-Apr 30 in the next?

@Timithos

2 жыл бұрын

It depends on the specific countries. That's pushing a common threshold of 6 months or 183 days too thinly in many cases. What if your flight is cancelled? What if travel between those countries is suddenly restricted? Most travelling nomads push for the trifecta of having three locations instead of two.

Question how would that be seen from tax perspective: 1. I am going to receive income from dividends only from country A 2. I will move to country B to become their tax resident but this country doesnt tax foreign income Will I have to pay taxes on that dividends at all? By all means I will stop being tax resident, full time worker, no home, family, children etc in country A. Dividends are income but its not full time job. And country B doesnt tax anything from abroad.

The real juicy question is what if youre a uk national who is a perpetual traveller. Do you not pay any taxes if your income does not originate in the uk?

I just looked up the country list of tax treaties with Canada, and I don't see Georgia on that list. Does that mean I would be double-taxed? I know Georgia has low taxes, but would I still need to pay Canadian income taxes if I'm living in Georgia for over 6 months?

@OffshoreCitizen

2 жыл бұрын

Doesn't necessarily mean you'll be double taxed just that you don't have treaty protection so it's more of a risk

Video Request: How is the value of a business incorporated into an exit tax (especially for the United States) and if the valuation is a lot higher than the assets, might it sometimes be prudent to dissolve a small business before expatriating?

@OffshoreCitizen

2 жыл бұрын

Interesting suggestions, thanks! Will se what we can do 👍 How did you like this video?

thanks

@OffshoreCitizen

Жыл бұрын

You're welcome!

What if I don’t own any property at all, in any country and don’t spend more than three months in any particular country per year? Does that grant me income tax- free status?

@anamariabrailean9065

Жыл бұрын

@@funnyav I have the same question. Have you found any answers?

@user-yi4mt4hp8u

5 ай бұрын

If you’re an eu citizen, US, Canada or Australian, then they will consider you a tax resident of your country of origin. If you’re a citizen of Caribbean countries and it 0% tax then you just file your taxes there

since when money received from your parents gets taxed ? what a wicked world we live in...

So if I am a US resident and travel full time to other countries and resell stuff online, am I supposed to pay taxes in the US. What if I don’t have an official business and as an individual Aquire and sell a PS5online for more than I paid. Is the difference taxable? How will the US government know, if I open a personal bank account in another country to deposit money.

@Timithos

2 жыл бұрын

You're supposed to be tracking your sales as at least a sole proprietor, and filing with the IRS no matter where you go as a US citizen. The foreign bank will report you to the US under CRS (Common Reporting Standards), and if you don't report the account to the IRS under FATCA (Foreign Account Tax Compliance Act) there are significant penalties. In fact many banks in the world will turn you back to the door the moment they find out you're an American.

@graphael4845

Жыл бұрын

@@Timithos What about if it's the same case than Chris, (travelling the world, selling products online out of the US) but not an US citizen (ex: French) ? Will i have to pay taxes somewhere? EX: An LLC is not taxing the incomes from outside the US if the owner is not US citizen.

What if you spend 2-4 y in each country? What's the best fiscal country to reestablish my company?

@OffshoreCitizen

2 жыл бұрын

Send us a message to discuss details of your situation or book a call

Thanks for the video. So we are graphic designers our company has been going for 18 years. We are digital nomads as we travel Uk and also sometimes Europe but up until now we have a boat in Uk where we work from (canalboat not motor boat so can’t cross seas) we are thinking of selling this and traveling the world staying maybe 2/3 months in places then moving on. As a partnership we generate about £65k a year before tax. Our clients are in spain and Uk. We would not be resident anywhere really. I am British my partner she is Spanish, but at the moment with Uk residency. So we’re if anywhere do I pay taxes or do I pay them as I earn the money there? So go to Japan 3 months pay tax on what I have earn there?

@OffshoreCitizen

2 ай бұрын

Lots to discuss here and not something that could be covered in a YT comment. Best is to book a call

I’m a trader in financial markets ( not bitcoin) I am a Uk resident, but I am constantly travelling and living inEurope staying for 3 months in each country. The products I trade are tax free in Uk,so I assume I don’t have to pay tax anywhere.

@3DJay429

Жыл бұрын

How do you deal with banking via a uk bank ? I’m in similar boat but not sure how to withdraw funds as I have uk bank

Don't you have this bass ackwards? 😜 Tax treaties wouldn't matter if you dont fall into the tax net of the country you are visiting.

I''m Canadian and plan to move to Spain. Can you talk about taxes on a digital nomad visa in Spain

@OffshoreCitizen

Жыл бұрын

We've published a video on that topic a couple of days ago :)

Interesting, thanks

@OffshoreCitizen

2 жыл бұрын

Always our pleasure! Are you a digital nomad?😄

Very good video :) What about if i have an LLC in the US (but not US citizen), i'm travelling the world, selling products online in EU? Will i have to pay taxes somewhere? EX: An LLC is not taxing the incomes from outside the US if the owner is not US citizen.

@OffshoreCitizen

Жыл бұрын

there are many things to consider here an the best strategy depends on many details of your specific situation. Probably best to reach out and we’ll be happy to assist

@graphael4845

Жыл бұрын

@@OffshoreCitizen What kind of details can change this specific situation ?

@alexandras.8972

6 ай бұрын

How to book a consultation ? Thanks ​@@OffshoreCitizen