Does there really are countries without taxes?
The idea of moving to a tax haven and pay 0% income tax sounds temptingespecially for entrepreneurs and nomads digital. However, living in a country without taxes it is not as simple as it seems. What is behind the jurisdictions with a tax burden low or zero?
Here demystify this strategy and disclose what it really involves.
Countries with low or no tax burden
Dubai (United Arab Emirates)
It currently offers a 0% personal income tax and a 9% for companies with certain thresholds. However, you are required to keep accounting from the year 2024.
Monaco
No personal income tax for residents, but the cost of living is one of the highest in the world, and the home requires significant investment.
Cayman Islands
Do not have income tax, capital gains or inheritances, but the service fees are high, and the cost of establishing a business can be prohibitive.
Hidden costs and commitments in these countries
Although these destinations have to offer a reduced fiscal burden, not everything is free nor simple:
- Administrative fees and licenses: Many countries apply annual rates for renewals of visas, permits, and business licenses.
- Requirements of economic substance: Dubai, for example, requires a physical presence, and minimum and local employees to qualify as a tax resident.
- Cost of living: In Monaco, the cost of a property can overcome the millions of euros, which reduces the tax benefits.
Is it really feasible to establish the tax residency in these countries?
The majority of the jurisdictions with zero taxes require proof of residence to grant the tax benefits.
- Test of permanence: You must live a minimum number of days to qualify, which excludes those who are simply traveling sporadically.
- Commitments of international report: Even in countries with low taxes, global treaties, such as CRS and FATCA require you to share information on financial accounts.
The future of the jurisdictions without taxes
The regulatory environment is changing rapidly.
- The OECD and the BEPS 2.0 looking to ensure that large corporations and individuals of high net worth contribute fiscally somewhere.
- Jurisdictions without taxes face pressures to align with standards global transparency and taxation minimum.
- All the countries of entry, have had a few tax rates as affordable countries that gradually, as more and more entrepreneurs or nomads digital residing in the country will be increased.
- The sustainability of the fiscal strategy will deeply linked with the legal security of the country, thing that very few people arise in the time you choose a country solely and exclusively on the basis of pay zero taxes.
How to design a fiscal strategy solid and secure
Moving to a tax haven is tempting, but it is only beneficial when it is done with deep knowledge of the rules and a strategy well-designed.
Does thinking about moving to a country with 0% tax?
Avoids the risks of planning deficient. Contact us to create a fiscal strategy solid that will maximize your profits and minimize your risks
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