Trading via own remote company in a no-tax-country

Sig · Oct 13, 2016

fhl said:
My only point was that a bunch of guys yakking on the internet isn't going to save much taxes, and it would be very dangerous to tax plan based on a thread on et. But that lawyers with experience at this can save you money, perhaps even all of it if you are willing and able to pay for the best.

We agree on that!

fhl · Oct 15, 2016

zdreg said:
of course it is.

tax deferral

vs. tax avoidance

View attachment 167272

Sorry z. There is a difference between avoidance and evasion. Look it up.

zdreg · Oct 15, 2016

fhl said:
Sorry z. There is a difference between avoidance and evasion. Look it up.

that was exactly my point which seemed to go over your ahead. i suggest you reread what i wrote before posting a nonsensical response.

fhl · Oct 15, 2016

zdreg said:
that was exactly my point which seemed to go over your ahead. i suggest you reread what i wrote before posting a nonsensical response.

Avoidance doesn't put anyone in jail, which is what you're picture represented. You either still don't get it, or you're ability to express a thought is deficient.

zdreg · Oct 15, 2016

fhl said:
Avoidance doesn't put anyone in jail, which is what you're picture represented. You either still don't get it, or you're ability to express a thought is deficient.

you are actually correct.

Mtrader · Oct 16, 2016

fhl said:
Sorry z. There is a difference between avoidance and evasion. Look it up.

The line between avoidance and evasion is very thin. But the difference is not important, what the IRS thinks about it is. If the IRS charges you in court it might take you millions (depending on the"evaded" amount) to escape. And even if you escape you will have a Pyrrhic victory. Your lawyers will cost you huge amounts of money and can even cost you more than just paying the IRS.

I once had a fight with my "IRS" and it took about 10 years before I finally won. For most people it is cheaper just to pay then go to court. Especially if I read stories about how expensive lawyers in the US can be. (OJ Simpson lost all his fortune on lawyers, from what I read).

So in fact you have the choice between:

will I pay the IRS?
will I pay my lawyers? And hope I will win or I will still have to pay the IRS too?
will I go and live somewhere where these problems cannot occur?

I chose for number 3 and never regretted my choice. But I am not an American so it was easier for me to find a decent solution. I could change in 1 day my situation, no problems with the possibilities to be taxed till X years after I left my country. I even kept my nationality and can return to my native country as much as I like. I will even still receive pension later.
Paying now around 10% (all included) taxes and social security instead of about 70%. And everything 100% legal.

The only problem is that you should make a substantial amount of money and it should be consistent over the years. My estimation is that over 95% of posters here are not in that situation. So I think this thread is mostly about a hypothetical situation.
I never discussed my "problem" on internet. I looked for professional advice and the problem was quickly solved. And much cheaper than paying lawyers to escape from horrible taxations based on own interpretation of avoidance and evasion.

bln · Oct 16, 2016

What if you are a resident of nowhere? what if you are a permanent tourist, staying for 3-6 months on tourist visa and moving from country to country.

Then one is taxed 0% for income and 0% for capital gains.

Sig · Oct 16, 2016

bln said:
What if you are a resident of nowhere? what if you are a permanent tourist, staying for 3-6 months on tourist visa and moving from country to country.

Then one is taxed 0% for income and 0% for capital gains.

You've gotta have a passport to go from country to country, no-one has to let you visit and when you're in someone else's country you have to follow their rules. That means if your passport is a blue one with United States on the front your worldwide income is taxed regardless of if you haven't stepped foot in the U.S. in decades (I know kids of expats in their 20s who have never stepped foot in the U.S and still pay U.S. taxes!). Other countries have their own rules, most of which are pretty complex and which don't necessarily allow you to even earn income in their country on a tourist visa, let alone avoid taxes on it. If you want to spend your life learning new tax rules every 6 months to avoid taxes I'd argue you've seriously lost perspective, unless of course that's something of genuine interest to you. I'd much rather just earn enough to be able to go where I want to go and live where I want to live simply because I want to.

Sig · Oct 16, 2016

Mtrader said:
The line between avoidance and evasion is very thin. But the difference is not important, what the IRS thinks about it is. If the IRS charges you in court it might take you millions (depending on the"evaded" amount) to escape. And even if you escape you will have a Pyrrhic victory. Your lawyers will cost you huge amounts of money and can even cost you more than just paying the IRS.

I once had a fight with my "IRS" and it took about 10 years before I finally won. For most people it is cheaper just to pay then go to court. Especially if I read stories about how expensive lawyers in the US can be. (OJ Simpson lost all his fortune on lawyers, from what I read).

So in fact you have the choice between:

will I pay the IRS?

will I pay my lawyers? And hope I will win or I will still have to pay the IRS too?

will I go and live somewhere where these problems cannot occur?

I chose for number 3 and never regretted my choice. But I am not an American so it was easier for me to find a decent solution. I could change in 1 day my situation, no problems with the possibilities to be taxed till X years after I left my country. I even kept my nationality and can return to my native country as much as I like. I will even still receive pension later.
Paying now around 10% (all included) taxes and social security instead of about 70%. And everything 100% legal.

The only problem is that you should make a substantial amount of money and it should be consistent over the years. My estimation is that over 95% of posters here are not in that situation. So I think this thread is mostly about a hypothetical situation.
I never discussed my "problem" on internet. I looked for professional advice and the problem was quickly solved. And much cheaper than paying lawyers to escape from horrible taxations based on own interpretation of avoidance and evasion.

Was that on withholding taxes, if you don't mind me asking simply out of curiosity?

bln · Oct 16, 2016

Sig said:
You've gotta have a passport to go from country to country, no-one has to let you visit and when you're in someone else's country you have to follow their rules. That means if your passport is a blue one with United States on the front your worldwide income is taxed regardless of if you haven't stepped foot in the U.S. in decades (I know kids of expats in their 20s who have never stepped foot in the U.S and still pay U.S. taxes!). Other countries have their own rules, most of which are pretty complex and which don't necessarily allow you to even earn income in their country on a tourist visa, let alone avoid taxes on it. If you want to spend your life learning new tax rules every 6 months to avoid taxes I'd argue you've seriously lost perspective, unless of course that's something of genuine interest to you. I'd much rather just earn enough to be able to go where I want to go and live where I want to live simply because I want to.

Yes, US is different, most other countries have sane tax rules. US is only one out of 240 or so countries in the world. Majority of people in the world does not live in US. Passport is linked to citizenship, the citizenship one can keep forever, one does not have to change citizenship and one can hold multiple ones.

It is not a sustainable lifestyle long term, but may work fine for 3-5 years or longer if one does not have employment, a family or own RE. Being able to earn large amount of money from trading while paying zero taxes is beneficial and allows one to build up ones account to millions in a shorter time. Then one can chose to move back and become a resident again.