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> Your tax residency will be based on where you spent the most time between all those and then all the other additional factors. Also false. Depends on the tax

> Your tax residency will be based on where you spent the most time between all those and then all the other additional factors. Also false. Depends on the tax laws of the countries, but most likely you wouldn’t be considered tax resident anywhere, absent of having a strong economic interests in one particular country (and tax havens wouldn’t care about this, and the burden of proof would be on the tax authority).

sfriedr 4y ago
This. Tax laws are very complicated and the 6 months rule is more a rule of thumb than a "hard" rule. In practice, the tax authorities have a set of tests they perform, where the time spend in a country is just one item among many - and these rules vary from country to country.
- refurb 4y ago
  Indeed. Every country is different. Being a "tax non-resident" doesn't necessarily mean you own no taxes either. In Singapore, tax non-residents simply pay a different rate. To be exempt from income tax entirely, you need to work in Singapore for fewer than 60 days. https://www.iras.gov.sg/taxes/individual-income-tax/basics-of-individual-income-tax/tax-residency-and-tax-rates/working-out-my-tax-residency https://www.iras.gov.sg/taxes/individual-income-tax/basics-o...
  - sgjohnson 4y ago
    It goes even deeper than that. There’s also the question on where is the money being made. Say a hypothetical scenario, I’m self-employed contractor working through a corporation in, say, Panama, and I spend some 120 days a year in Singapore. Would Singapore even subject me to any taxes? But yes, ultimately one can be a digital nomad, not be a tax resident anywhere, and not be subject to any income or corporate taxes anywhere. You just have to be very particular about the countries you pick.
    - refurb 4y ago
      Yes they would tax you because the work was done in Singapore. Would they know? Probably not.
      - sgjohnson 4y ago
        But it’s not you earning any money, it’s an entity in Panama. Just outlining the complexity of this.
        refurb 4y ago
        That’s not how Singapore defines “Singapore earned income”. They define it by “where the work was completed” not “where income come from” or “country where you were hired”. Many countries do it that way. Edit: I misread. Well if your Corp doesn’t pay you I see the point, but you’re also the sole owner?
        yardstick 4y ago
        You’d still have to pay the corporate tax rate in Panama I assume? How would you eventually obtain beneficial use of that money? Ie how and when would it reach your personal bank account? If it won’t, how do you plan to use the money for your own gain? I assume (haven’t done any research) that Panama wouldn’t let you treat things like paying for Netflix, movie tickets, supermarket shops, clothes shops, etc as business expenses? At some point you’d need to transfer it from Panama to yourself and at that point it would be taxable (capital gains or income tax depending on how you transfer). If you time things right you could be resident in a country without income tax eg UAE. But you would have still paid Panama corporation tax I believe.
        sgjohnson 4y ago
        Panama doesn’t tax income on foreign gains, so the corpo tax there would be 0%.
    - LunaSea 4y ago
      That list of countries is usually pretty thin if you also remove countries which forbid you of working while on a tourist visa.
PeterisP 4y ago
I wouldn't bet on "most likely you wouldn’t be considered tax resident anywhere" - first, you have a default tax residency at your country of origin and the local law is likely to say that you lose it only if you can prove another tax residency. Second, countries are likely to err on the side of caution which benefits them, so if you have unusual arrangements, then it's quite plausible that you are a tax resident of multiple countries and owe taxes to all of them - many countries have bilateral treaties to avoid dual taxation (which is the default outcome in many cases), so a digital nomad in an unusual situation might owe taxes to two or more countries, but are very unlikely to owe tax to no country. "the burden of proof would be on the tax authority" - no, definitely not. The tax laws generally assert their claim on all income accrued in a certain country. The abovementioned 'non-dual-taxation' treaties have a process so that in reasonable scenarios the worker only pays tax in their home country, but if they don't apply (for example, because the 'home country' is a tax haven with whom there such a treaty isn't made), they owe tax where they earned the income. The mere fact that you are a tax resident somewhere else does not mean that you're exempt from local taxes, that requires fulfilling the criteria of those dual taxation treaties. The weak point there is enforcement - there are all kinds of ways how a digital nomad can ensure that they won't be hassled much to collect the taxes they owe and they often can avoid paying them - but legally, they still owe them and are at the mercy of the authorities not finding out or not caring.

sfriedr 4y ago

This. Tax laws are very complicated and the 6 months rule is more a rule of thumb than a "hard" rule. In practice, the tax authorities have a set of tests they perform, where the time spend in a country is just one item among many - and these rules vary from country to country.

refurb 4y ago
Indeed. Every country is different. Being a "tax non-resident" doesn't necessarily mean you own no taxes either. In Singapore, tax non-residents simply pay a different rate. To be exempt from income tax entirely, you need to work in Singapore for fewer than 60 days. https://www.iras.gov.sg/taxes/individual-income-tax/basics-of-individual-income-tax/tax-residency-and-tax-rates/working-out-my-tax-residency https://www.iras.gov.sg/taxes/individual-income-tax/basics-o...
- sgjohnson 4y ago
  It goes even deeper than that. There’s also the question on where is the money being made. Say a hypothetical scenario, I’m self-employed contractor working through a corporation in, say, Panama, and I spend some 120 days a year in Singapore. Would Singapore even subject me to any taxes? But yes, ultimately one can be a digital nomad, not be a tax resident anywhere, and not be subject to any income or corporate taxes anywhere. You just have to be very particular about the countries you pick.
  - refurb 4y ago
    Yes they would tax you because the work was done in Singapore. Would they know? Probably not.
    - sgjohnson 4y ago
      But it’s not you earning any money, it’s an entity in Panama. Just outlining the complexity of this.
      - refurb 4y ago
        That’s not how Singapore defines “Singapore earned income”. They define it by “where the work was completed” not “where income come from” or “country where you were hired”. Many countries do it that way. Edit: I misread. Well if your Corp doesn’t pay you I see the point, but you’re also the sole owner?
      - yardstick 4y ago
        You’d still have to pay the corporate tax rate in Panama I assume? How would you eventually obtain beneficial use of that money? Ie how and when would it reach your personal bank account? If it won’t, how do you plan to use the money for your own gain? I assume (haven’t done any research) that Panama wouldn’t let you treat things like paying for Netflix, movie tickets, supermarket shops, clothes shops, etc as business expenses? At some point you’d need to transfer it from Panama to yourself and at that point it would be taxable (capital gains or income tax depending on how you transfer). If you time things right you could be resident in a country without income tax eg UAE. But you would have still paid Panama corporation tax I believe.
        sgjohnson 4y ago
        Panama doesn’t tax income on foreign gains, so the corpo tax there would be 0%.
  - LunaSea 4y ago
    That list of countries is usually pretty thin if you also remove countries which forbid you of working while on a tourist visa.

PeterisP 4y ago

I wouldn't bet on "most likely you wouldn’t be considered tax resident anywhere" - first, you have a default tax residency at your country of origin and the local law is likely to say that you lose it only if you can prove another tax residency. Second, countries are likely to err on the side of caution which benefits them, so if you have unusual arrangements, then it's quite plausible that you are a tax resident of multiple countries and owe taxes to all of them - many countries have bilateral treaties to avoid dual taxation (which is the default outcome in many cases), so a digital nomad in an unusual situation might owe taxes to two or more countries, but are very unlikely to owe tax to no country. "the burden of proof would be on the tax authority" - no, definitely not. The tax laws generally assert their claim on all income accrued in a certain country. The abovementioned 'non-dual-taxation' treaties have a process so that in reasonable scenarios the worker only pays tax in their home country, but if they don't apply (for example, because the 'home country' is a tax haven with whom there such a treaty isn't made), they owe tax where they earned the income. The mere fact that you are a tax resident somewhere else does not mean that you're exempt from local taxes, that requires fulfilling the criteria of those dual taxation treaties. The weak point there is enforcement - there are all kinds of ways how a digital nomad can ensure that they won't be hassled much to collect the taxes they owe and they often can avoid paying them - but legally, they still owe them and are at the mercy of the authorities not finding out or not caring.