When you spend abroad for most of the year, you run the risk of additional taxes.
Tax residency is the membership of a natural or legal person to the tax system of a particular state.
In migration legislation, a resident is someone who has a residence permit in the country, in tax law - one who is registered with the tax authority and pays various taxes. A person may have residence permit or citizenship of the country, but not be a tax resident, or vice versa: as a tax resident, one may not have a residence permit.
Tax residents are obliged to pay taxes on work, business, commissions, pensions, bonuses, benefits and income from real estate (when leasing and reselling). Taxes are paid from income received both on the territory of a foreign country and outside it. However, since an agreement on avoiding double taxation has been concluded between Russia and most countries, taxes on Russian income abroad are not paid if a declaration is filed at home.
In the UK, those who are only tax residents pay only the income tax received in the country. For persons who are tax residents with domicile (residence permit with the right to reside), the tax is levied both on income received in the territory of the kingdom, and on income received outside of it.
Among the countries with the lowest taxes are Montenegro and Bulgaria (rates of income and corporate taxes are 9 and 10% respectively). Among the countries with the highest fees - France. Companies whose employees receive more than 1 million euros per year, since 2014, pay a corporate tax at a rate of 75%.
How is the status of the tax resident.
You can become a resident of two or more countries if they follow different criteria, determining the tax residency in their national law. Conversely, a person may not be a tax resident in any country, if the relevant conditions are not identified. The absence of a tax residency does not absolve the taxpayer from the need to pay taxes. Simply in this case there is no tax jurisdiction that would tax global revenues.
Initially, a person is a tax resident of the country of which he is a citizen. If a person spends time abroad, the tax residency is determined by a number of conditions:
- Accommodation in the country 183 days a year or more. This is the main condition in most countries. In Germany, exceptions are cases when a person comes to the country on a private visit (on a visit or for treatment), and the period of stay is not more than a year. In the US it is required to live in the country more than 183 days in the last three years. In the UK, tax residents are also those who visit the kingdom for four consecutive years - if in aggregate the visit lasted more than 91 days. In Kazakhstan, Latvia, Romania, Finland and Sweden, tax residents are defined as persons who stayed in the territory for a minimum of 183 days during any successively selected 12 months.
- Availability of housing (own or rented). In Germany, the Netherlands and Switzerland an individual can become a tax resident if he only acquires or rents housing for a long time. If real estate is available in several countries at once, the residence of the country where personal and economic interests are concentrated is assigned.
- Presence of economic and personal interests (for example, business and family). This condition can be a priority in Belgium, Italy and France. In these countries, a person can be considered a tax resident if the family members (children, spouse or partner) live permanently in the country. It does not matter how long this person is there: the status is assigned, even if he spends only a couple of months a year there. If personal and economic interests can not be determined, a person becomes a resident of the country where he has a permanent place of residence (permanent residence). If permanent residence is in both countries or it is not in any of them, the person is assigned the residence of the country of which he is a citizen.
- Presence of citizenship. For example, in Bulgaria, Latvia, the US and the Philippines, a person with a local passport can remain a tax resident even if he works in another country. If a person has dual citizenship or no citizenship of any of the countries, the issue is resolved with the authorities until mutual agreement is reached.
- The presence of a company registered in the country (for legal entities). In the UK, a legal entity becomes a tax resident if the company is registered on the territory of the country or where central control and control is located.
Julia Kozhevnikova, Tranio.Ru.
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