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Author Topic: Resident of no nation and tax  (Read 3659 times)
wachtwoord
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July 26, 2012, 05:17:32 PM
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I was giving this some thought the other day, Googled a bit and couldn't find any satisfactory results so I though why not ask it here and see if anyone here knows.

Is it possible to not be obligated to pay taxes anywhere (mind I'm talking about legal possibilities)? Say you have no income, just a diversified portfolio of sufficient size to live of hedged against inflation and what not. Say you don't want to live anywhere for extended periods of time and just travel around. Under what conditions will you not be obliged to pay taxes on your holdings and/or the derived income off of that.

* So no capital gains tax, or the Dutch equivalent yield tax where you pay 30% over a fictitious 4% yield on all your holdings, or any other equivalent where governments try to steal your portfolio

Findings
* Dividend tax seems unavoidable
* VAT is unavoidable as well
* If you work (labour)  and earn you will obviously have to pay taxes in the country the earnings are made

I know Americans have to pay tax wherever they live and some have renounced their US citizenship because of this (does not apply to me personally but might be of interest to some).

Anyone that can help me with this? This is really a long term dream of mine (traveling around for the rest of my existence, seeing everything there is to see in the world) and not paying taxes makes it a lot easier to achieve, so I'm curious about the legal possibilities Smiley

Also, would it be possible to own or rent a house in a country without becoming obligated to file for taxes (to have a base of operations and to store some stuff)?




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Vladimir
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July 26, 2012, 05:24:56 PM
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http://en.wikipedia.org/wiki/Perpetual_traveler

here you go.

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wachtwoord
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July 26, 2012, 05:31:37 PM
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Thanks I was looking for that term which I had heard years before. However that article states I need a legal residence and an asset residence. Is that true because I would like to have neither if that is possible. I see no value in having a legal residence and my assets can be purely digital. For example my stock portfolio is kept (not managed) by an American company but I am obligated to pay taxes in the Netherlands so what influence does having an asset residence even have?


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July 26, 2012, 07:21:48 PM
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For example my stock portfolio is kept (not managed) by an American company but I am obligated to pay taxes in the Netherlands so what influence does having an asset residence even have?


You could setup a corp in the Cayman Islands and transfer ownership of your stock portfolio to over the corp. Cayman Islands would be "your" (your corp's) asset residence and it would be setup in such as way that the corp's profits are not subject to Dutch taxes.

Edit: This is just a generic example and may not specifically apply to your situation.
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July 27, 2012, 12:18:59 PM
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Thanks I was looking for that term which I had heard years before. However that article states I need a legal residence and an asset residence. Is that true because I would like to have neither if that is possible. I see no value in having a legal residence and my assets can be purely digital. For example my stock portfolio is kept (not managed) by an American company but I am obligated to pay taxes in the Netherlands so what influence does having an asset residence even have?

I think you need to have an address somewhere in order to open bank and brokerage accounts and to renew your passport. To reach your objectives you should take up residence in a tax haven and if you have enough money then you can travel most of the time.

http://www.lowtax.net/lowtax/html/jurhom.html

Those who cause problems for others also cause problems for themselves.
jago25_98
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July 27, 2012, 06:09:10 PM
 #6

the Bahamas (I think only a land tax), Bermuda, The Cayman Islands, Dubai, Andorra, Bahrain (there's currently a revolution going on that will no doubt bring all the glories of social democracy) - basically no tax at all,

while Belize, Panama, Hong Kong, Malaysia - all have no tax on foreign income,

The only thing is having your investments taxed - there are a several countries without dividend taxes (e.g. the UK, Hong Kong, Singapore, etc), but essentially no where to invest without corporate taxes.

Which is cheapest? I think Panama is ~$1500/year for the company formation fee. I think that's the only one which gives directors privacy? Any info Bahrain & Malaysia? I find the whole thing rather interesting regardless of the tax subject
wachtwoord
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July 27, 2012, 06:26:42 PM
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There's a decent list of personal tax haven countries - places like:

the Bahamas (I think only a land tax), Bermuda, The Cayman Islands, Dubai, Andorra, Bahrain (there's currently a revolution going on that will no doubt bring all the glories of social democracy) - basically no tax at all,

while Belize, Panama, Hong Kong, Malaysia - all have no tax on foreign income,

there are 2x more like these, both 'no tax at all', and 'no tax on foreign income'.

The problem with the 'perpetual tourist' thing (not having a legal residence anywhere), is that your previous high tax country will claim that if you are not a resident somewhere else, then you are still a resident with them and that you owe them taxes (laws vary on this, but I know Canada is like that).  So you probably do need a 'base of operations' (unless your country will 'release' you without one).

Ah that really sucks that you can't legally do this. Someone (not me Tongue) should fight this to the highest court related to basic human rights. I want the right to be free from oppression by the state. Pretty please ?

The only thing is having your investments taxed - there are a several countries without dividend taxes (e.g. the UK, Hong Kong, Singapore, etc), but essentially no where to invest without corporate taxes.

Yeah but you don't have to live there to gain the benefit. For example I own stock in the UK company http://finance.yahoo.com/q?s=azn&ql=1 and the dividend is never taxed. However for the dividends from my holdings from countries that do tax dividends I effectively don't pay dividend taxes as well because tax treaties reduce the taxation to 15% which I can subtract from my dutch taxes on my holdings to avoid double taxation. So effectively I pay 1.2% of the total worth of my holdings (above a certain minimum) right now. (Note: I am not rich and couldn't live of my holdings by a long long shot, it's just a dream for later Wink)

Why would corporate taxes apply to me? I only see that they apply indirectly due to me holding stock in companies that pay corporate taxes but how would it apply to me directly? Also, why do people wish to start businesses in tax havens for holding their portfolio and not simply become a resident there themselves. If you transfer your portfolio to the corporation, but own that entire corporation your net worth isn't reduced and your taxes are not reduced as well as a result.

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July 27, 2012, 08:36:39 PM
 #8

Quote
I was thinking of places to physically move to yourself - without having to break any laws and worry about getting caught.  Places for incorporating an offshore company is a whole other list (with only a little overlap), I know Bahrain and Malaysia aren't really good for that.

Ok. That's residency.

People get these different things confused:

- residency = where you "live"
- domicile = where you pay tax. Usually but not always the same as where you live
- citizenship = generally means your passport. Nationality. Possible to revoke and become "stateless". Examples are usually refugees. Britain has taken away citizenship from plenty of previous colonies too.

If you are born you get a birth cert that puts you into the system. It's give and take. You get welfare, school, benefits. You give taxes, freedoms, national service etc. That birth cert has a place and that place locks you to the residency. You are "American" or you are "Libyan".
You can actually be born and skip the birth cert. You can also revoke the contract that is your birth cert. But it's a 2 way contract. You have to take the rough with the smooth.

Now, what happens if you rock up on a shore of somewhere with no passport etc? Well, I guess it might be best to ask Libyans etc who have done this.

Each country has it's own way of determining residency. The residency is usually the first step to the other changes but not always.

Domicile is where you pay tax. It can be hard to separate domicile from residency. Lets say I work on a boat that crosses from Africa into Europe. You might cross >5 borders. Each country bills you and your company for tax. You could end up with less than nothing. So we have double taxation treaties for this.

 Companies and corporations in particular move their domicile to somewhere cheap because as a company it is easier for them to move. Profits can then be moved to where it's cheap. Also, as a company, governments give you a nicer treatment. In the UK you can claim back your expenses for VAT for example and corporation tax is lower. If an employee or director takes ownership of funds then that is a wage. You have to pay tax on this but those funds are safe from loss if for example the company gets sued. You can also defer profits and pile profits back into the business for more profit. This is the advantage of being a company. There's also massive scope for corruption.
Employee proles think this is somehow immoral and turn a business matter into personal matters, thinking that somehow they are not a company. Well, that is NOT our the government and business treat you. Everyone with a birth cert has a company entity. If you can arrange income in a way like a company does, giving yourself a legal entity that you have more control of and you have enough cash to cover the fees you can get the rewards like a company can.

That's why I ask where is the cheapest place to incorporate with favorable tax is.

The ideal setup is to:
- have a company somewhere low tax (pseudo-domicile)
- have a second passport in a place that doesn't ask for many duties (citizenship)
- live somewhere cheap on tax (resident) but,
- live close to somewhere fun and cheap (tourist)

How you achieve that depends on where you're coming from. The USA is one of the more difficult places to come from (banking blacklists, visas that aren't visas etc) but it's also the place where these processes have been researched the most with the most help on hand.


If you're interested send me a PM saying where you're from, background, income or whatever and I'll have a guess as to what options you might have as to escaping.
edit: Most of the time it comes down to economics and commitment: how much can you dedicate to this?
jago25_98
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August 05, 2012, 11:15:33 AM
 #9

Here are the stateless people crossing the med:
https://watchthemed.crowdmap.com/

Here's the policies:
http://www.unhcr.org/refworld/docid/4ca1ae002.html
http://www.unhcr.org/refworld/docid/4bbf387d2.html
http://www.unhcr.org/pages/4d22f95f6.html

Summary:
http://www.opendemocracy.net/people-migrationeurope/article_1292.jsp

If you're going for Australia they may let you die. If you're going for Europe the same thing can happen but it depends.

The document on what stateless is, is interesting
silvertree
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August 11, 2012, 05:35:07 PM
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I travelled round Europe for 15 odd years.

Only paid income tax a few times doing seasonal work for a boss.

I lived in the UK for some years from 2006 and ran a bussiness for a couple of years..Before i registered i asked at the CAB where i stood thinking the tax man might claim i owed a fortune in tax.They couldnt give me a straight answer..It seemed you have to be living in a country for more than six months and keep returning there to qualify.
It a grey area, I never did find out for sure.

I know as soon as you register as self employed or resident they will start wanting some thing.


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August 11, 2012, 06:17:12 PM
 #11

Anyone that can help me with this? This is really a long term dream of mine (traveling around for the rest of my existence, seeing everything there is to see in the world) and not paying taxes makes it a lot easier to achieve, so I'm curious about the legal possibilities Smiley

The dollar vigilante is a site you might be interested to check:
http://www.dollarvigilante.com
It features even a second passport service:
http://www.tdvpassports.com

wachtwoord
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August 12, 2012, 05:40:33 PM
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Thanks to anyone who posted here. I have plenty to read Smiley

Of course please keep contributing!

hashman
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August 12, 2012, 09:23:04 PM
 #13

Just a possible hint, if you go around asking everyone you can for permission, you're not going to get it. 
No matter how hard you try you will never be 100% legal.
You might also be interested in "How to be free in an unfree world" by Harry Browne. 
Also try Switzerland Smiley   

good luck in your travels!


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August 12, 2012, 10:26:54 PM
 #14

I forgot to mention another nice relevant website:
http://www.sovereignman.com
And along the same line, anything by Doug Casey.

BTW, browsing Scribd, I just found this:
http://www.scribd.com/doc/30966295/Johnny-Liberty-The-Global-Sovereign-s-Handbook

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