You incorporate in the country in which you live 183 days per year (or more). It's simple.
If you live more than 183 days in country X, but you incorporate in country Y, you'll have a hard time explaning it to the tax authorities.
If you live more than 183 days in country X, but you incorporate in country Y, you'll have a hard time explaning it to the tax authorities.
https://en.wikipedia.org/wiki/Controlled_foreign_corporation
Just also be prepared to deal with the massive headache of a company is one jurisdiction and living (and paying taxes) in another. This can be a headache even if you live in the US if you’re split between states.
Which I would assume would be part of the calculations for any recommendation.
Quite a few places are keen to attract overseas investment and will let you incorporate there.
Conversely, having an overseas company with a bank account there (usually more tricky than the incorporation!) that you don't treat as your personal bank account shouldn't create problems.
But the compliance / Know Your Customer rules are very strict in the UK: it's almost impossible to get a bank account there unless you are legally resident there.
Eg. I may start a company in Dubai, access the local talent and pay 0% corporate rate tax. Depending on the country I'm residing in, I may have more or less difficulties in proving things are actually run in Malta and not in the country where I am residing.
Having employees, directors, shareholders meeting in the country could be helpful in doing that. I don't recommend doing it while resident in some countries that are particularly terrible for this kind of setup, such as Italy.
For example, if you live in Finland you can easily incorporate in Estonia which has a much more preferable tax structure. The only thing you need to do is to have all the shareholder's meetings outside of Finland and it's legal.
I can't remember all the details, but a lot of it comes down to substantial ties. i.e. spouse, family, primary residence, secondary residences, number of days spent in the country, number of years away from country, etc.
Countries solve the issue of 'competing' for an individuals tax residency through tax treaties which lay out the method in which the tests are applied and who would 'win' in a tie-break situation. This avoids the issue of double taxation but means you'll be subject to tax somewhere in any one year.
That's likely where the 180 days figure comes from as it's one of the most broad and substantive tests to determine tax residency, but it's not the only metric used. The actual details are more nuanced.
For example, if you give up tax residency in one country but then spend 179 days there each year to visit your spouse and kids – they'll probably claim you're tax resident.
"How can they even know" is the wrong question. "How can you think that you can get away with living places without paying taxes?" is a better question. There is a lot of small scale tax evasion going on, like registering a car in Luxemburgh while living in France. Or buying boatloads of tax free booze somewhere and forgetting to declare it. You can probably get away with that without too much effort. But dodging income tax altogether? Forget it. Property tax? Good luck. If anything, you'll end up paying more because of your ambiguous residency status. There are all kinds of treaties for cross-border workers and all kinds of ways to prevent getting taxed twice. But there aren't many ways to avoid getting taxed.
I know maybe bordering a slippery slope towards tax fraud or something, but theoretically, I'm curious how clued in the tax authorities are to where you actually reside vs where you say you reside.
1.) Don’t even think about screwing with tax authorities.
2.) See #1.
3.) See #1.
https://translate.google.com/translate?sl=nl&tl=en&u=https:/...
https://translate.google.com/translate?sl=nl&tl=en&u=https:/...
This was obviously to prove he lived there for tax evasion.
I think using a national identity card to travel would bypass those checks (apparently the trips where I used my national identity cards didn't appear) - maybe driving instead of flying could help as well but I haven't tried.
I think the more time passes the harder it will get to evade that - and problems are likely to be compounded by countries running out of pensions money and the covid economic crisis - so I'd recommend just moving to a country that treat you fairly from a taxation perspective instead of trying to break the rules of a country which treats you unfairly.
> Since 2011, the EU has had a system for exchanging tax and financial accounts information between Member States. Tax authorities in the EU have also agreed to cooperate more closely to tax their taxpayers correctly and combat tax fraud and tax evasion.