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How does that work if you divide your time between multiple EU countries? How can they even know? The Schenghen area is borderless.

tcldr 5y ago
Most countries have a series of 'tests' to determine tax residency. 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.
elric 5y ago
I suspect you haven't had the pleasure of living in multiple EU countries. Schengen is borderless for travel. It is not paperless (or borderless) for living. Depending on where you live, you may have to register with local government. If you have a job somewhere, you'll have to register with tax authorities. You can pretend you're a "digital nomad", but as the saying goes: death & taxes! You'll end up paying your taxes, one way or another. "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.
sdevonoes 5y ago
The tax authorities of your EU country will know about your all your bank accounts in every other EU country. This is by design.

tcldr 5y ago

Most countries have a series of 'tests' to determine tax residency. 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.

elric 5y ago

I suspect you haven't had the pleasure of living in multiple EU countries. Schengen is borderless for travel. It is not paperless (or borderless) for living. Depending on where you live, you may have to register with local government. If you have a job somewhere, you'll have to register with tax authorities. You can pretend you're a "digital nomad", but as the saying goes: death & taxes! You'll end up paying your taxes, one way or another. "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.

sdevonoes 5y ago

The tax authorities of your EU country will know about your all your bank accounts in every other EU country. This is by design.