Eastern Europe still has a lot of opportunities. Latvia, for example, has no taxes on stock and dividend income in a corporation. You can make a zillion trades and still no taxes. You might have to pay yourself a minimum salary once in a while, though. And dividends is only 10% to a fysical person (no tax between companies). Same in Estonia, no taxes in a corporation. I live in Latvia myself. I enjoy living in Eastern Europe, coming from Scandinavia. And it's dirt cheap.
Best Country for Trading (Tax efficiency)
- Thread starter ET873
- Start date
If you become a perpetual traveler as a non US citizen while you have a residency in the UAE, your only home is in the UAE and you spend the required min. 1 day / every 180 days in Dubai and you're traveling around the world but you don't spend more than a month in any country then I think it's safe to say that you're not liable to taxes (you may be subject to withholding taxes on certain incomes though but that's unavoidable anyway). However there is something that is stressing me.
As a day trader you can't take advantage of the territorial tax system countries because if you're trading in a country then your trading income is locally sourced thus subject to taxation. What is the case then if you're trading in a country as a tourist? Let's say you spend 4 weeks in France then 4 weeks in Spain then 4 weeks in Italy and so on and you make $100k with your trading activities in each country. As far as I know most countries requires non residents to declare incomes earned from domestic sources. If you're trading while you're in their country then it's locally sourced thus I guess taxable.
I think it's a grey area because it's really hard for them to know if a tourist is trading in his/her hotel room however I still would be interested to know whether it's really legally tax-free if you're trading as a tourist in a country (let's say in a tax aggressive country like US, Australia, Germany, etc.) or it's only tax-free because they can't find this out!?
I think it's just a grey area because the tax authorities in most countries thinks that you're subject to taxes elsewhere so they don't want to dig into their tourists' business activities however if you're a resident in a zero tax country like the UAE then you're not subject to taxes anywhere so they could easily say that the money that one makes with day trading on their soil is taxable as a non resident.
Anyone any idea?
As a day trader you can't take advantage of the territorial tax system countries because if you're trading in a country then your trading income is locally sourced thus subject to taxation. What is the case then if you're trading in a country as a tourist? Let's say you spend 4 weeks in France then 4 weeks in Spain then 4 weeks in Italy and so on and you make $100k with your trading activities in each country. As far as I know most countries requires non residents to declare incomes earned from domestic sources. If you're trading while you're in their country then it's locally sourced thus I guess taxable.
I think it's a grey area because it's really hard for them to know if a tourist is trading in his/her hotel room however I still would be interested to know whether it's really legally tax-free if you're trading as a tourist in a country (let's say in a tax aggressive country like US, Australia, Germany, etc.) or it's only tax-free because they can't find this out!?
I think it's just a grey area because the tax authorities in most countries thinks that you're subject to taxes elsewhere so they don't want to dig into their tourists' business activities however if you're a resident in a zero tax country like the UAE then you're not subject to taxes anywhere so they could easily say that the money that one makes with day trading on their soil is taxable as a non resident.
Anyone any idea?
No it's not.
Because you will be trading from your initial account which might be in, for example UK. You will only be taxed when you focus on doing something in their country/ related to them. Since, you're account is from UK, it doesn't matter wherever you go as long as you don't open an account there.
@thescalpmaster is correct. You'd be a non-resident earning income from worldwide sources. If you have an UK account trading US futures, your income is not local when living in Spain or France. Now, I don't know how it is if you're living in France trading the French equities as a non-resident.
Actually it doesn't matter where the account is located, the relevant issue is where you are resident for tax purpose
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Not exactly: It is for most jurisdictions (at least of EU) the center of your personal life, where your family is. You won`t get away (at least with "northern EU" jurisdictions and even CH) with 2days p.a. as a new tax domicile. Furthermore have you ever considered the cost of such tax evasion (including cost of Dubai sponsor to get resedency) and further practical sides of such life? The medicine will be worse than the illness.
And coming to illness: If in any said year you will stay january in Germany and again end of october you go there for medical reasons and stay rest of the year in treatment: You will be prey of the German Taxation Sharks for the whole year!!!
And coming to illness: If in any said year you will stay january in Germany and again end of october you go there for medical reasons and stay rest of the year in treatment: You will be prey of the German Taxation Sharks for the whole year!!!
IRS issues new partnership audit rules
New rules governing how partnerships will be audited beginning in 2018 have been issued by the IRS. The new audit regime will allow the IRS to examine a partnership's income, gains, losses, deductions and credits, and make the partnership responsible for adjusting any of those items. (Pensions & Investments)
New rules governing how partnerships will be audited beginning in 2018 have been issued by the IRS. The new audit regime will allow the IRS to examine a partnership's income, gains, losses, deductions and credits, and make the partnership responsible for adjusting any of those items. (Pensions & Investments)
I think most of you didn't get my question. If I would become a perpetual traveler and I would spend 4 weeks in each countries (13 different countries each year) and my only home (a rented apartment) would be in Dubai and I would have a company in the Nevis LLC with a bank account in Singapore because I do not want neither my company nor my bank accounts to be located in the UAE and this company would have brokerage accounts (forex) in various countries (UK, AU, NZ, etc.) and I'd be trading in a hotel room in Sydney, New York, London, Paris, Rome, etc. then would this income become taxable?
My logic is that even if I'm just a tourist, I'd still be making significant income with forex trading while I'm in their country thus it may be considered domestic income and it would become declarable and taxable as well. I mean those positions which I have both opened and closed while I was in that particular country.
Anyone any idea?
My logic is that even if I'm just a tourist, I'd still be making significant income with forex trading while I'm in their country thus it may be considered domestic income and it would become declarable and taxable as well. I mean those positions which I have both opened and closed while I was in that particular country.
Anyone any idea?
I don't mean to be unkind, but you are asking for a generalisation when you really need to deal with specifics.
As has been explained above, the primary consideration is whether you are deemed resident for tax purposes.
Next, is trading income deemed tax exempt as capital gains, which it is in some jurisdictions.
Next, if it is deemed taxable income, then is it deemed local earned income because you made the effort to earn it locally. If so, as a non-resident, you get whacked a flat 30% in some jurisdictions.
Last, and by no means finally, what is construed as work in whatever place you are in? I live in Thailand. I cannot volunteer my time, teaching English, or caring for dogs in a shelter, even without pay, because it is deemed as work for which I need a work permit.
It is a huge grey area. You could claim it's not work, you are simply managing your investments.
When your passport is taken away and you are told to prove your case in a local court before you can leave, the best free advice you can get here on ET is not going to be any comfort to you.
I'm not doing the above described scenario rather I've just started a discussion about this issue. Presently no one knows the answer (incl. advisors) because it's a grey area, indeed.
Your points are valid and good:
the income may be treated as capital gain in one country and personal income in another and one may say that I'm just managing my wealth while another may say that I'm trading and I should pay taxes.
As far as I know the US wouldn't care as it's capital gains according to their laws thus tax-free for non residents. Other countries prefer to differentiate between investments and speculative short term positions and they categorize the latter as personal income.
Huge grey area, that's why I'd like to hear what's your opinion about this as nowadays being a PT is pretty fashionable and relatively popular.