Tax-favorable countries: 0% on cap gains WITHOUT a 'professional' bucket taxing CGs as normal income

M

mitchell_1

I read most of the tax-friendly-countries thread in the forum, but had a more nuanced Q I didn't see addressed.

There's a list of countries that levy NO personal income tax, which of course is ideal, but they are typically not all that desirable as places to live, e.g. Panama, Costa Rica, Monaco (so the absence of income tax is presumably a carrot they have to dangle to entice ex-pats.)

There's a far broader list of countries that would seem to be better options (developed cities, higher quality of life, etc) and with no (or very low e.g. <10%) taxes on capital gains. HOWEVER most of those on this list still differentiate between professional & non-professional traders, and if they determine that you're a pro (usually via factors like frequency/complexity of trades, % income derived from trading, etc) they'll tax your capital gains as ordinary income, defeating the entire purpose.

So I'm hoping someone else has looked into this and can offer any tips on developed countries where *any and all stock trades* are tax-free (or taxed very lightly) regardless of any pro vs non-pro distinction.
 
I've looked into this but haven't found anything you are looking for. Switzerland and the Netherlands will likely classify you as a pro if you are a day trader. Monaco would be great but you need a couple of millions to get in. Panama does not look bad and ended up no.1 on my list of places to emigrate to followed by Bulgaria (10% flat rate and in the EU). With Bulgaria I couldn't find any information if you can deduct capital losses/commissions/interest paid from your profits which could make it unattractive). Malaysia is also a hot candidate but it is hard to find details on how to calculate your tax bill e.g. if you are an active trader and you cannot claim commissions as expenses could be a deal breaker)
 
If you have min 2.5Mil then you can migrate to Singapore but except transport/ domestic help and food everything else is expensive ( rent/ education/ car)
With Malaysia you need only 150K but not as easy as Singapore
 
@mitchell_1
Why do you think Monaco is less desirable to live there ?

@zwangerz
- I would say Panama is also a good candidate, depending on your personal taste.
- Monaco is not for the poor people, but you dont need millions to get in.
- I agree that it is nice if you can claim commissions as expenses, but if it is not possible then it should only be a deal breaker for traders with a very high commission-to-profit ratio. If you pay 10% to 20% of your profits for commissions, it is not very nice if you cannot deduct these expenses, but I would not call it a deal breaker. If your commissions are something like 40-50% of your profits, then it is another story.
 
The UK permits financial spreadbetting on stocks, commodities, forex etc. etc. There is no tax of any description payable on SB profits. You don't even have to submit paperwork.
 
CALLumbus said:
@mitchell_1
Why do you think Monaco is less desirable to live there ?

@zwangerz
- I would say Panama is also a good candidate, depending on your personal taste.
- Monaco is not for the poor people, but you dont need millions to get in.
- I agree that it is nice if you can claim commissions as expenses, but if it is not possible then it should only be a deal breaker for traders with a very high commission-to-profit ratio. If you pay 10% to 20% of your profits for commissions, it is not very nice if you cannot deduct these expenses, but I would not call it a deal breaker. If your commissions are something like 40-50% of your profits, then it is another story.
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You need to deposit 500k into a Monaco bank account and leave it there if you have connections otherwise it's more like 1 million. Then a studio apartment will cost you another million at least + living expenses(I think I've read the authorities won't grant you residency if you just rent and don't work a job at a local business).

In a bad year I can end up paying 50% commission of my profits so I would end up paying taxes on phantom profits.
 
tomorton said:
The UK permits financial spreadbetting on stocks, commodities, forex etc. etc. There is no tax of any description payable on SB profits. You don't even have to submit paperwork.
More...
I assume profit from stock CFDs are taxable?
 
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