No Tax Residence, banks and brokerages

[valhalla360]

Originally Posted by Dockhead

"Piercing the corporate veil" is a different concept unrelated to taxes. It means piercing the "veil" of limited liability.

There are very useful and perfectly legal uses of corporate entities to insulate you from liability (the original purpose of corporations) and to optimize taxes. Just needs the right jurisdictions, the right planning, and competent advice. And the right passport.

Never said it was tax related. I'm just trying to figure out what he thinks he's accomplishing.

[s/v Jedi]

Originally Posted by Dockhead

Most countries tax you on your world wide income if you are a tax resident.

There are a few exceptions: Belize, Costa Rica, Guatemala, Nicaraugua, some African countries, Singapore, Georgia. Then some countries don't have income tax at all; much of the Caribbean, Monaco, some ME countries. You can kind of do this as a "non-dom" resident of the UK, but you have to pay a separate fee for the privilege.

Almost everywhere else, you pay on your worldwide income. You do in all European countries.

My remark was in the context (left out of the quote) of having no income from work (from anywhere in the world), i.e. retired people.

[valhalla360]

Originally Posted by Dockhead

There are a lot of countries which still do citizenship by investment.


Malta is the easiest pathway to European citizenship. It takes just €750k and 12 months of residency, plus buy a house, and you have an EU passport.


Antigua is the best Caribbean one, and the Antiguan passport is a good one, with visa free travel to Schengen countries and a bunch of others. Requires only a $200k investment in an Antiguan property, and takes a few months.


Cyprus (another EU country) used to be popular among Russians, and yes, that one has been tightened up, and is now very expensive.


Thousands of Americans are doing this every year, and more and more, as it is really risky, difficult and expensive to be an expatriate entrepreneur with a U.S. passport. My total tax and FFBAR returns this year in the U.S. ran to more than 1000 pages. Absolutely crazy.

If the OP is looking at dumping hundreds of thousands into a citizenship to save on taxes...he's got accountants and lawyers to walk him thru the process.

Not many Americans are giving up their US citizenship. Getting a new one doesn't get you out of taxes until they rake you over the coals far worse than if you just retained your citizenship with very few rare exceptions. Plus, if the OP was already an expatriate entrepreneur, as already said, he'd already have the accountants and lawyers to walk him thru.

[Montanan]

References:

https://www.oecd.org/tax/automatic-e...tax-residency/

RULES GOVERNING TAX RESIDENCE
This section provides an overview of the tax residency rules applicable in jurisdictions that are committed to automatically exchanging information under the Common Reporting Standard CRS, as provided to the OECD Secretariat by those jurisdictions. Tax residence is determined under the domestic tax laws of each jurisdiction. There might be situations where a person qualifies as a tax resident under the tax residence rules of more than one jurisdiction, and therefore is a tax resident in more than one jurisdiction. For the purposes of the CRS, Financial Institutions must ensure that Account Holders (or Controlling Persons) disclose all tax residences in the required self-certification. For the purposes of the Common Reporting Standard, the Account Holder (or Controlling Person) must disclose all its tax residences in the required self-certification. Kindly note that the mere right to reside in a given jurisdiction (on permanent or temporary basis) or the fact of holding citizenship of a given jurisdiction does not automatically mean that a person shall be considered a tax resident in such a jurisdiction or that, upon obtaining residency or citizenship, the tax residency is extinguished in the former jurisdiction(s) of tax residence."

The information can be accessed by clicking on the name of the jurisdiction at the end of this page. While the jurisdictions and the OECD Secretariat endeavour to keep the information as accurate and up to date as possible, it is to be considered as preliminary guidance only.


The Common Reporting Standard is an agreement between more than 70 countries to exchange information with each other regarding investments held in those countries. Under this system the banks are required to let the tax authorities know the names of individuals who have accounts with them and in which countries they are resident.

https://www.investopedia.com/tax-res...-state-5114689



FATCA implications:

Exemplary HSBC: https://www.expat.hsbc.com/internati...n-affects-you/

Foreign Account Tax Compliance Act (FATCA)
The Foreign Account Tax Compliance Act (FATCA) is a piece of legislation by the US Department of Treasury and the US Internal Revenue Service (IRS) to counter tax-evasion.

It's aimed at all financial institutions and other intermediaries globally and seeks to prevent US persons from using non-US accounts and businesses to avoid paying tax on their income and assets.

In 2013, Jersey signed an Inter-Government Agreement (IGA) to implement FATCA. It means it will share information about the accounts and finances of US persons with the IRS, via the Jersey Tax Authority.

We too are proud of our commitment to becoming fully FATCA compliant in all countries where we operate and we continue to review the effects on our customers to identify where we need to report information to the IRS or local tax authority.
FATCA applies to all HSBC Expat customers, new and existing. Depending on the type of accounts, policies or agreements you hold with us, we may be in touch requiring further information or documentation in order to verify your status.

If you've multiple relationships with different HSBC Group members you may receive more than one request so it's important that you respond to all queries even if you believe you've already supplied this.

If you don't provide us with this information within the stated timeframe, we may need to report your accounts and/or policies to the tax authorities in Jersey. It may also prevent us from opening new accounts and or/policies for you and result in the possible closure of existing accounts.



10 Non-CRS Countries For Banking Privacy in 2022 Link:
https://nomadcapitalist.com/finance/...tries-banking/

[Montanan]

CRS

https://en.wikipedia.org/wiki/Common_Reporting_Standard

The Common Reporting Standard (CRS) is an information standard for the Automatic Exchange Of Information (AEOI) regarding financial accounts on a global level, between tax authorities, which the Organisation for Economic Co-operation and Development (OECD) developed in 2014.

Its purpose is to combat tax evasion. The idea was based on the US Foreign Account Tax Compliance Act (FATCA) implementation agreements and its legal basis is the Convention on Mutual Administrative Assistance in Tax Matters. 97 countries had signed an agreement to implement it, with more countries intending to sign later. First reporting occurred in 2017, with many of the rest starting in 2018.


. . .

Information exchanged
The information and its exchange format are governed by a detailed standard, whose details are listed in a 44-page long document.[13]

Each participating country will annually automatically exchange with the other country the below information in the case of Jurisdiction A with respect to each Jurisdiction B reportable account, and in the case of Jurisdiction B with respect to each Jurisdiction A reportable account:[14]

Name, address, Taxpayer Identification Number (TIN) and date and place of birth of each Reportable Person.
Account number
Name and identifying number of the reporting financial institution;
Account balance or value as of the end of the relevant calendar year (or other appropriate reporting period) or at its closure, if the account was closed.
Capital gains, depending on the type of the account (dividends, interest, gross proceeds/redemptions, other)




Global Forum on Transparency and Exchange of Information for Tax Purposes

https://en.wikipedia.org/wiki/Global...r_Tax_Purposes

The Global Forum on Transparency and Exchange of Information for Tax Purposes was founded in 2000 and restructured in September 2009. It consists of OECD member countries as well as other jurisdictions that have agreed to implement tax related transparency and information exchange.[2] The forum works under the auspices of the OECD and G20. Its mission is to "implement the international standard through two phases of peer review process".[1] It addresses tax evasion, tax havens, offshore financial centres, tax information exchange agreements, double taxation and money laundering.

In 2000, the Forum published a blacklist of 35 tax havens, which by 2009 had shrunk to zero. It has since focused on increasing the standard for exchange of information. As of December 2021, the Forum had 163 member tax jurisdictions and the European Union, all on equal footing.

Activities
The Forum promotes the implementation of two internationally agreed standards on exchange of information for tax purposes: the standard on Exchange of Information on Request (EOIR) and the standard on Automatic Exchange of Information (AEOI). Members commit to at least implement EOIR.[4]

Exchange of Information on Request
The Forum ensures compliance with EOIR through an intense peer review process, the forum's main activity since 2009, which is carried out by its Peer Review Group composed of 30 members representative of the diversity of the Forum, and is currently chaired by Singapore.[5]

The review focuses on three main parts, divided into ten elements: Ownership and identity information (A.1); Accounting records (A.2); Banking Information (A.3); Access to Information (B.1); Compatibility of Rights and Safeguards (B.2); Effective mechanisms for EOIR (C.1); Network of EOIR partners (C.2); Confidentiality (C.3); Respect of Rights and Safeguards (C.4); Quality and Timeliness (C.5). Every element is evaluated with regards to the legal and regulatory framework (Phase 1) but also its effective implementation (Phase 2). The output of the peer review is a report in which a rating (Compliant; Largely Compliant; Partially Compliant; Non-compliant) is attributed to each element, alongside an overall rating. The draft report is discussed and approved by the Peer Review Group, and adopted by all Forum members. Where areas of weakness are identified during the review, reports include recommendations setting out improvements jurisdictions need to make in order to reach the international standard. The peer review reports are published and made publicly available.

A first round of reviews was conducted for all member jurisdictions and jurisdictions relevant to the work of the Forum, and ended in 2016. Then, the 2010 Terms of Reference used to conduct the reviews were strengthened to integrate new principles, such as the availability of beneficial ownership information, and became the 2016 Terms of Reference. The Forum is currently in the middle of its second round of reviews.

Since 2009 it has classified tax havens into a "blacklist" of non-committers and a "graylist" (or "greylist") of non-implementers of the request-based "internationally agreed tax standard". The terms blacklist and graylist are not used by the Forum but by news services like Reuters,[6] the BBC[7] and the Congressional Research Service.[8]: 6 

Automatic Exchange of Information
In 2014, the Global Forum adopted the Standard for Automatic Exchange of Financial Account Information in Tax Matters (the AEOI Standard), developed by the OECD working with G20 countries. The AEOI Standard requires financial institutions to automatically disclose information on financial accounts they maintain for non-residents to their tax authorities under the globally-agreed Common Reporting Standard (CRS), who in turn exchange this information with the tax authorities of the account holders’ country of residence.

To be able to exchange information under the AEOI Standard, jurisdictions are asked to:

Introduce domestic rules requiring their financial institutions to collect and report the data to be exchanges
Put in place international agreements with each if their partners to deliver the widespread networks necessary for automatic exchange
Put in place the technical solutions to link into the Common Transmission System (CTS) that was put in place by the OECD’s Forum on Tax Administration and managed by the Global Forum
To deliver a level playing field, the Global Forum launched a commitment process under which 100 jurisdictions committed to implement the AEOI Standard and exchanges commenced accordingly in 2017. In 2018, a total of 93 jurisdictions exchanged information under the AEOI Standard. For 2019, a total of 102 jurisdictions are committed to undertake exchanges under the AEOI Standard.

[Dockhead]

Originally Posted by valhalla360

If the OP is looking at dumping hundreds of thousands into a citizenship to save on taxes...he's got accountants and lawyers to walk him thru the process.

Not many Americans are giving up their US citizenship. Getting a new one doesn't get you out of taxes until they rake you over the coals far worse than if you just retained your citizenship with very few rare exceptions. Plus, if the OP was already an expatriate entrepreneur, as already said, he'd already have the accountants and lawyers to walk him thru.

The number of Americans expatriating may not be a large percentage out of 300 million, but it's nevertheless in the thousands, and almost all are millionaires. I know quite a few of them.

The reason for doing it is not usually to pay no tax, but to get out of the extremely onerous reporting requirements and risks relating to reporting, and get out of the disadvantages of being caught between two tax systems. Several of the Americans I know who expatriated did it in favor of Swedish citizenship, and primarily because paying both Swedish and American taxes means you can pay almost double, if you have a lot of capital income, because of the different way in which the two countries tax capital income.

What this has to do with the OP I have no idea; he has posted contradictory things and it's not possible to tell what his deal is. But there's nothing wrong with asking around for general ideas, before starting the clock with the professional advisers.


As to being "raked over the coals" upon expatriation -- it's not worse than any given tax year, for an average expatriate entrepreneur. One more time and you're free. I haven't done it (yet), but it's awfully tempting.

[denverd0n]

Originally Posted by Dockhead

The number of Americans expatriating may not be a large percentage out of 300 million, but it's nevertheless in the thousands, and almost all are millionaires. I know quite a few of them.

Not disagreeing with you at all, just asking for clarification...


The term "expatriate" is often used to refer to someone who leaves their home country to live elsewhere, even when they do not renounce citizenship in their home country. So, are you talking about Americans who have actually renounced their U.S. citizenship? Or just about those who have moved elsewhere, perhaps even sought dual citizenship, but have NOT renounced their U.S. citizenship?

[s/v Jedi]

Originally Posted by denverd0n

Not disagreeing with you at all, just asking for clarification...


The term "expatriate" is often used to refer to someone who leaves their home country to live elsewhere, even when they do not renounce citizenship in their home country. So, are you talking about Americans who have actually renounced their U.S. citizenship? Or just about those who have moved elsewhere, perhaps even sought dual citizenship, but have NOT renounced their U.S. citizenship?

You must renounce your US citizenship to be let go of Federal taxation, there is no other way.

[Cheyne]

Found this:

https://md.usembassy.gov/u-s-citizen...2C350.00%20fee.


Tax & military obligations /no escape from prosecution

Also, renouncing your U.S. citizenship may have no effect whatsoever on your U.S. tax or military service obligations. (Contact the Internal Revenue Service or U.S. Selective Service for more information). In addition, the act of renouncing U.S. citizenship will not allow you to avoid possible prosecution for crimes which they may have committed in the United States, or escape the repayment of financial obligations previously incurred in the United States or incurred as United States citizens abroad.

[letsgetsailing3]

Originally Posted by Dockhead

The problem with U.S. taxation is that:

1. You don't get much infrastructure or civilization even if you live there
2. You have to pay even if you don't live there.

and the zinger:

3. File up to thousands of pages of information returns on every detail of your foreign businesses and accounts even if there is no tax due, and pay up to millions in fines if you make a small good faith mistake.

Not sure I follow.

You do get roads, police protection, embassy services, a military, some element of community health services (like a widely distributed COVID vaccine) and the internet, even if you don't live there all the time.

I've lived in and out of the U.S., but those are things I've used on a regular basis, even if I just visit.

Sure, I get taxed on those things, and the dollars I hold get taxed when the government does something like forgive other people's debt without any actual revenues to cover that decision.

Still, there's infrastructure there than I can use, when I need to. And when I'm not in the U.S., I'm using some other country's infrastructure.

[Dockhead]

Originally Posted by denverd0n

Not disagreeing with you at all, just asking for clarification...

The term "expatriate" is often used to refer to someone who leaves their home country to live elsewhere, even when they do not renounce citizenship in their home country. So, are you talking about Americans who have actually renounced their U.S. citizenship? Or just about those who have moved elsewhere, perhaps even sought dual citizenship, but have NOT renounced their U.S. citizenship?

It's a good question -- indeed the terms are not clear at all.


"To expatriate" -- means to give up your citizenship
to "be an expatriate" -- means to live abroad long term


Yeah, I know it's not logical.

[Dockhead]

Originally Posted by letsgetsailing3

Not sure I follow.

You do get roads, police protection, embassy services, a military, some element of community health services (like a widely distributed COVID vaccine) and the internet, even if you don't live there all the time.

I've lived in and out of the U.S., but those are things I've used on a regular basis, even if I just visit.

Sure, I get taxed on those things, and the dollars I hold get taxed when the government does something like forgive other people's debt without any actual revenues to cover that decision.

Still, there's infrastructure there than I can use, when I need to. And when I'm not in the U.S., I'm using some other country's infrastructure.

Well, this is a long conversation. I don't want what my military does, not at all. I see a U.S. embassy for something once a year at most, and pay for what I get there. Health care costs money -- pay as you go with gigantic health insurance premiums -- and I have to watch people around me with no access to health care at all. Education costs money (a lot of it), and schools are paid for by exorbitant property taxes, not income taxes, whether I use them or not. Police protection -- yes, sorely needed with U.S. crime rates. I sleep well at night knowing that our men in blue are harassing (if not shooting) black people. You didn't mention our highest prison population in the world -- our tax dollars at work again keeping them locked up.


That's in a very small nutshell. It's not a good deal. It's a much better deal in just about any given European country, particularly the Nordic countries. There you pay a little more on consumption and salary income, but much less on investment and capital income, so it's a really good deal for the capitalist pigs amongst us. And what you get for your taxes is incomparable. Education and health care are not "consumption" there, so the fact that consumption is a bit more taxed is really not a problem. And plus you can sleep at night knowing there aren't people in need around you.

[goboatingnow]

Originally Posted by Dockhead

The problem with U.S. taxation is that:

1. You don't get much infrastructure or civilization even if you live there
2. You have to pay even if you don't live there.

and the zinger:

3. File up to thousands of pages of information returns on every detail of your foreign businesses and accounts even if there is no tax due, and pay up to millions in fines if you make a small good faith mistake.

I have plenty of sympathy for people trying to get out of that web. Otherwise, yes, pay your taxes and be a good citizen, but optimize them.

The Scandinavian countries are actually an astonishingly good deal for the taxes you pay there. Business taxes are much lower than in the U.S., property taxes are nearly zero, and you pay no capital gains tax at all unless you take money out of your investment account for consumption. Income taxes are high but they are almost flat, and you get a lot for them. And they are not high compared to U.S. income taxes plus health care costs plus education costs.

Yes the US is an incredibly bureaucratic place and very expensive to do business in. I know I had a business there

In Ireland i can create a tradable company online in about 30 minutes , file every thing myself. Etc

Like many places corporation tax is low , capital gains is mediocre , income tax is high , mind you I can rent a room in my house and receive €14000 a year from that room, zero income tax ! Nice. Property taxes are low ( €120 a year )

[GreenWave]

Originally Posted by goboatingnow

Yes the US is an incredibly bureaucratic place and very expensive to do business in. I know I had a business there

In Ireland i can create a tradable company online in about 30 minutes , file every thing myself. Etc

Like many places corporation tax is low , capital gains is mediocre , income tax is high , mind you I can rent a room in my house and receive €14000 a year from that room, zero income tax ! Nice. Property taxes are low ( €120 a year )

Ireland is a poor example of what society needs in general. If every country were like Ireland for businesses, the individual would carry even more burden.

[danstanford]

Originally Posted by GreenWave

Ireland is a poor example of what society needs in general. If every country were like Ireland for businesses, the individual would carry even more burden.

This is a very cogent observation. It is important in my opinion to understand that ultimately there is really only one taxpayer and it is us. If you tax corporations more they simply pass the costs on to their customers.

The one significant exception can be those economies exporting significant amounts of natural resources who can shift the taxes to the importers in other nations. The only thing that bothers me is when people hold up these exporting nations as the aspirational standard for social services versus taxes.