Best Country for Trading (Tax efficiency)

[virtusa]

As I understand, this tax scheme is intended for "non-Italian-sourced income".

This explains what "non-Italian-sourced income" is:
An source of income is deemed to have originated abroad (with a “mirror reading” of Article 23 TUIR and without prejudice to that provided by international tax treaties) when

1. OR the asset generating the income is situated abroad,
2. OR the business generating the income was conducted abroad,
3. OR when the individual remitting the income is resident abroad for fiscal purposes.

Only one condition has to be fullfilled.
There is no mentioning of investor. They speak about ANY KIND OF INCOME.

In any kind of trading/investing, the assets (brokerage accounts) are outside of Italy, so one condition is fulfilled as indicated in the fiscal law.

The main reason why they speak about the "non-Italian-sourced income" is to avoid that Italians would try to use fraudulent setups to abuse this flat tax rate for existing businesses in Italy. They could then reduce the paid taxes massively.

 

[mfocus]

Does Singapore tax traders as a business (regular income tax) if trading volume exceeds a certain threshold (you have a finance degree, experience from working in banks, etc.) like the majority of other countries do or will you also in that case enjoy 0% tax in Singapore?

I have never heard of that situation you described. The criteria of being taxed as regular income is if you are a 'professional', e.g. meaning you are employed and your income/salary is from trading.

 

[TimtheEnchanter]

I am not a career trader, but curious: What's the best country for trading? Considering tax efficiency / lowest capital-gains tax only. Somewhat in a response to this thread:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=189497&perpage=6&pagenumber=1

If I was a young single guy with a couple of million cash, I'd go to Switzerland.

 

[virtusa]

If I was a young single guy with a couple of million cash, I'd go to Switzerland.

I know a trader who left Switzerland. The reason was the high taxes.
He was not a daytrader.
Switzerland is a beautiful but expensive country, for taxes as well as cost of living.

 

[TraderFreedom]

I know a trader who left Switzerland. The reason was the high taxes.
He was not a daytrader.
Switzerland is a beautiful but expensive country, for taxes as well as cost of living.

UK can be interesting. If you trade in the UK and are non-resident for tax, then there is no tax on shares. You would pay them in a country of your tax residence. If you travel without becoming a tax resident anywhere, then you won't pay tax.

 

[Vstk_]

Switzerland is a beautiful but expensive country, for taxes as well as cost of living.

I second that.
Switzerland is the place to go if you want an amazing quality of life and are willing to pay for it ; you are not going to feel rich with a couple million in there.

 

[d08]

If I was a young single guy with a couple of million cash, I'd go to Switzerland.

Why? Switzerland seems more for old people who want a comfy, quiet life.

 

[Fred_11]

I'm a Canadian citizen going to graduate school in the US on an F visa beginning January 2021 (ignore COVID-related issues for now) while continuing to trade. Here's my tax strategy...anyone see anything I'm missing? I will ultimately consult with an attorney but want to do my research first.

1. Dec 15 2020: move to Belize (or other country with zero income- or capital gains tax); rent an apartment there. (Pay to Canada any 'departure tax' owing on my investments.)
2. January 2021: Begin studies in the US on my F visa. Imp: F-visa students are considered tax residents of their home countries, not the US. -- i.e. days spent in the US on an F-visa do not count towards the Substantial Presence Test (SPT) for purposes of US tax residency.

That's it. I wouldn't be a US tax resident due to the SPT considerations above. The ONLY question is whether I can claim to be a Belize tax resident (right?). To that end, is there a minimum amount of time I'd need to live/spend in a country in order to claim tax residency there? I'd be giving up my Canadian residence (and paying any 'departure taxes' owing), so I'm not sure on what basis Canada could claim me as a tax resident going forward.

Thoughts, anyone?

 

[otctrade]

To qualify for residency, an individual must be present in Belize for 183 days or more during a calendar year.

 

[virtusa]

I'm a Canadian citizen going to graduate school in the US on an F visa beginning January 2021 (ignore COVID-related issues for now) while continuing to trade. Here's my tax strategy...anyone see anything I'm missing? I will ultimately consult with an attorney but want to do my research first.

1. Dec 15 2020: move to Belize (or other country with zero income- or capital gains tax); rent an apartment there. (Pay to Canada any 'departure tax' owing on my investments.)
2. January 2021: Begin studies in the US on my F visa. Imp: F-visa students are considered tax residents of their home countries, not the US. -- i.e. days spent in the US on an F-visa do not count towards the Substantial Presence Test (SPT) for purposes of US tax residency.

That's it. I wouldn't be a US tax resident due to the SPT considerations above. The ONLY question is whether I can claim to be a Belize tax resident (right?). To that end, is there a minimum amount of time I'd need to live/spend in a country in order to claim tax residency there? I'd be giving up my Canadian residence (and paying any 'departure taxes' owing), so I'm not sure on what basis Canada could claim me as a tax resident going forward.

Thoughts, anyone?

This is a traders forum, what you need is a fiscal advisor who knows very well the laws of the country you go to and the country you come from. All answers posted on ET have a considerable risk of not being correct or at least being inaccurate.
Unless there is a trader on ET who actually uses this construction and confirms he never had any problems.

In general residency means being physically present in the country. How long depends from which country is involved. Many countries use the 183 days rules, but some don't use it. Some use the calendar year as reference period, but others use any running 12 month period. If you assume calendar year, but are wrong, it can be very costly.

Get professional help.