5 ms·

It's not entirely true that citizenship determines where you pay most of your taxes, in fact it might only be true of the US. It's certainly not been the case f

It's not entirely true that citizenship determines where you pay most of your taxes, in fact it might only be true of the US. It's certainly not been the case for any other country I've lived in. Most have a residency test, if you're in the country cumulatively for 186 days you pay tax there. If you've had tax taken out of your salary in a country where you are not a tax resident and the country has a double tax treaty with whoever you are meant to be paying tax to then you can use it as a credit against any tax liabilities you may have there. The UK is a bit of an exception, in that foreigners in the UK can declare themselves "non-domiciled" and not declare any foreign income they did not bring into the country. A bit of a loophole if you're foreign, wealthy, and can afford to leave most of your money offshore. Probably explains why there are so many celebrities and billionaires living in London.

BerislavLopac 15y ago
Hm, I'm wondering, what if you travel around and you never spend more than 186 days in any single country? Assuming you visit only the countries that use that same approach, does it mean that you never pay any taxes? Doesn't sound plausible to me...
- dualogy 15y ago
  What's not plausible about this? People are doing it. It's not even much of a "loophole" since ultimately, 90% of people prefer to settle down for residency somewhere rather than keep travelling for years. The tax man always goes after the average 90% of people first. But yeah, depending on your citizenship you can do this, known as PT: "permanent traveller", perpetual tourist, previous tax-payer etc... Be sure to know the rules of the countries you visit and more importantly those of your citizenship country. If you're German, you cannot do this less-than-180-days-per-year operation if you hold "tangible economic interests in the country" such as: being employed there, having property interest there, or other assets such as company shares in or from within the country etc. So again, not a workable "loophole" for the majority of people but a decent state of affairs for the vast minority of Tim Ferris-style indy web-biz travellers with no significant "financial" assets or interests inside the country of citizenship.
- glenngillen 15y ago
  Yep, I know of quite a few people who are effectively doing that. If they have to have an address for anything, it's the hotel they stay in most regularly in Bangkok. Nice and central as a travel hub, and that Thai government doesn't want any money from you if you're not a resident of some sort which they aren't if they leave the country at least once every 90 days. Business is run out of one of the various offshore islands that doesn't want you're money unless you're living there, so all income if effectively tax free.

BerislavLopac 15y ago

Hm, I'm wondering, what if you travel around and you never spend more than 186 days in any single country? Assuming you visit only the countries that use that same approach, does it mean that you never pay any taxes? Doesn't sound plausible to me...

dualogy 15y ago
What's not plausible about this? People are doing it. It's not even much of a "loophole" since ultimately, 90% of people prefer to settle down for residency somewhere rather than keep travelling for years. The tax man always goes after the average 90% of people first. But yeah, depending on your citizenship you can do this, known as PT: "permanent traveller", perpetual tourist, previous tax-payer etc... Be sure to know the rules of the countries you visit and more importantly those of your citizenship country. If you're German, you cannot do this less-than-180-days-per-year operation if you hold "tangible economic interests in the country" such as: being employed there, having property interest there, or other assets such as company shares in or from within the country etc. So again, not a workable "loophole" for the majority of people but a decent state of affairs for the vast minority of Tim Ferris-style indy web-biz travellers with no significant "financial" assets or interests inside the country of citizenship.
glenngillen 15y ago
Yep, I know of quite a few people who are effectively doing that. If they have to have an address for anything, it's the hotel they stay in most regularly in Bangkok. Nice and central as a travel hub, and that Thai government doesn't want any money from you if you're not a resident of some sort which they aren't if they leave the country at least once every 90 days. Business is run out of one of the various offshore islands that doesn't want you're money unless you're living there, so all income if effectively tax free.