Europe: can you be not resident in any country for tax purposes?

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Topic Author
galepoggi
Posts: 24
Joined: Sun Oct 31, 2021 2:44 am

Europe: can you be not resident in any country for tax purposes?

Post by galepoggi »

I am planning what I'll do in the future as I am retiring; and at the moment it looks like I will be spending time in France, the UK and Portugal, since I have family or connections I want to be close to in these 3 places. It's possible that I won't be for 183 days/year or more in any of those countries. I know for the UK it's complicated snce there's the question of ties etc. But supposing I didn't meet the criteria for fiscal residence in any country, does it mean that in that case I would pay, in each country, taxes on the interests/dividends for the investments in that country, as opposed to having one particular country where I am considered as resident where I'd pay taxes on all my income including the foreign part?
tananaev
Posts: 48
Joined: Thu Jun 14, 2018 5:40 pm

Re: Europe: can you be not resident in any country for tax purposes?

Post by tananaev »

I always thought if you don't spend more than 180 days in any new country then you keep your original tax residency, but I haven't looked too much into it, so I could be wrong.
zuma
Posts: 602
Joined: Thu Dec 29, 2016 12:15 pm
Location: EU

Re: Europe: can you be not resident in any country for tax purposes?

Post by zuma »

You need to look at the tax laws for each country where you spend time. In general, some countries consider you a tax resident if you spend more than X consecutive days/months there — even if you don’t have a permanent home in that country. You might owe taxes in some cases on all global income. In other cases, you will be taxed only on income earned in the country that considers you a tax resident. It really depends on each country.

In theory I suppose it’s possible to avoid being a tax resident in Europe if you move around enough, but I don’t know the laws for the countries that you mentioned.
DJN
Posts: 901
Joined: Mon Nov 20, 2017 12:30 am

Re: Europe: can you be not resident in any country for tax purposes?

Post by DJN »

Hi,
aim to be tax resident in one country. Preferably in the one with the most advantageous regime, otherwise you run the risk of tax avoidance issues or worse still tax evasion.
I would suggest that Portugal might be a good candidate with the non habitual residence programme (NHR). https://www.bogleheads.org/wiki/EU_non- ... _residence
You need to study any pension that you might already have and how to perhaps use your tax residence to gain some advantage.
You need to carefully study your tax liabilities currently and plan accordingly so as to avoid any potential for lingering tax liabilities in any one country even after you have left as a tax resident.
DJN
Yah shure. | Have a look at the Bogleheads Wiki in the first instance.
Topic Author
galepoggi
Posts: 24
Joined: Sun Oct 31, 2021 2:44 am

Re: Europe: can you be not resident in any country for tax purposes?

Post by galepoggi »

DJN wrote: Thu Jan 13, 2022 5:36 am Hi,
aim to be tax resident in one country. Preferably in the one with the most advantageous regime, otherwise you run the risk of tax avoidance issues or worse still tax evasion.
thanks for the heads up (I guess that's the right expression. I was in fact worried about this, and so I posted the question. It's just that since I won't be working it's more difficult to determine where my residence is; I will aim like you say to have one in Portugal (or UK, both are better than France) based on the length of time I spend.
masni
Posts: 26
Joined: Thu Sep 04, 2014 5:56 am

Re: Europe: can you be not resident in any country for tax purposes?

Post by masni »

All 3 countries will ask for proof of your tax residency that that you have paid taxes in the other country. You cannot just say, "oh, it is not just your country". They will ask for proof that you have paid taxes on your income from the other countries.

I just choose a country that has the best tax situation for you, and make it your resident.
Topic Author
galepoggi
Posts: 24
Joined: Sun Oct 31, 2021 2:44 am

Re: Europe: can you be not resident in any country for tax purposes?

Post by galepoggi »

masni wrote: Fri Jan 14, 2022 10:21 am All 3 countries will ask for proof of your tax residency that that you have paid taxes in the other country. You cannot just say, "oh, it is not just your country". They will ask for proof that you have paid taxes on your income from the other countries.

I just choose a country that has the best tax situation for you, and make it your resident.
Yes of course I would pay taxes on income from other countries. But, if I am not resident in any of them for tax purposes, the idea would be that I'd pay taxes on Uk income in the UK, on French income in France etc.
Otoh if I am resident in one country, say the UK, I would pay taxes on income from ALLaround the world in the UK (except income from real estate rental, which in general is paid in the country where the house is).
The trouble with the first type of scenario is that I would be in a ta bracket based on the income in each coutry, thus lower than that based on the global income. So I am a bit confused about the rules and implementation. I mean, if there's on country where you work at least some of the time, it's clearly that of residence. But I will not be working (at least not paid work)
TXJeff
Posts: 117
Joined: Mon Sep 25, 2017 7:47 pm

Re: Europe: can you be not resident in any country for tax purposes?

Post by TXJeff »

galepoggi wrote: Thu Jan 13, 2022 2:29 am I am planning what I'll do in the future as I am retiring; and at the moment it looks like I will be spending time in France, the UK and Portugal, since I have family or connections I want to be close to in these 3 places. It's possible that I won't be for 183 days/year or more in any of those countries. I know for the UK it's complicated snce there's the question of ties etc. But supposing I didn't meet the criteria for fiscal residence in any country, does it mean that in that case I would pay, in each country, taxes on the interests/dividends for the investments in that country, as opposed to having one particular country where I am considered as resident where I'd pay taxes on all my income including the foreign part?
Actually, the controlling factors here will be visa type and time limits. If you are planning to enter european Schengen countries as a tourist from the US, you will be limited to spending 90 days in Europe every 180 days. As for the UK, Americans with a tourist visa are limited to "six months" which is usually interpreted as 180 days. So, no danger in either case of going over 183 days. And you would be a tourist, with no tax obligations.

If you are planning a longer stay, that will require a visa of some type. These are available to US retirees, but they typically come with the status of tax resident in that country, and may require tax payments there, in addition to any US obligations. If you go this route, there is a lot of information available about these longer visa options. 
zuma
Posts: 602
Joined: Thu Dec 29, 2016 12:15 pm
Location: EU

Re: Europe: can you be not resident in any country for tax purposes?

Post by zuma »

TXJeff wrote: Fri Jan 14, 2022 11:39 am
galepoggi wrote: Thu Jan 13, 2022 2:29 am I am planning what I'll do in the future as I am retiring; and at the moment it looks like I will be spending time in France, the UK and Portugal, since I have family or connections I want to be close to in these 3 places. It's possible that I won't be for 183 days/year or more in any of those countries. I know for the UK it's complicated snce there's the question of ties etc. But supposing I didn't meet the criteria for fiscal residence in any country, does it mean that in that case I would pay, in each country, taxes on the interests/dividends for the investments in that country, as opposed to having one particular country where I am considered as resident where I'd pay taxes on all my income including the foreign part?
Actually, the controlling factors here will be visa type and time limits. If you are planning to enter european Schengen countries as a tourist from the US, you will be limited to spending 90 days in Europe every 180 days. As for the UK, Americans with a tourist visa are limited to "six months" which is usually interpreted as 180 days. So, no danger in either case of going over 183 days. And you would be a tourist, with no tax obligations.

If you are planning a longer stay, that will require a visa of some type. These are available to US retirees, but they typically come with the status of tax resident in that country, and may require tax payments there, in addition to any US obligations. If you go this route, there is a lot of information available about these longer visa options. 
I’m pretty sure the OP is not from the US.
Topic Author
galepoggi
Posts: 24
Joined: Sun Oct 31, 2021 2:44 am

Re: Europe: can you be not resident in any country for tax purposes?

Post by galepoggi »

zuma wrote: Fri Jan 14, 2022 12:38 pm
TXJeff wrote: Fri Jan 14, 2022 11:39 am
galepoggi wrote: Thu Jan 13, 2022 2:29 am I am planning what I'll do in the future as I am retiring; and at the moment it looks like I will be spending time in France, the UK and Portugal, since I have family or connections I want to be close to in these 3 places. It's possible that I won't be for 183 days/year or more in any of those countries. I know for the UK it's complicated snce there's the question of ties etc. But supposing I didn't meet the criteria for fiscal residence in any country, does it mean that in that case I would pay, in each country, taxes on the interests/dividends for the investments in that country, as opposed to having one particular country where I am considered as resident where I'd pay taxes on all my income including the foreign part?
Actually, the controlling factors here will be visa type and time limits. If you are planning to enter european Schengen countries as a tourist from the US, you will be limited to spending 90 days in Europe every 180 days. As for the UK, Americans with a tourist visa are limited to "six months" which is usually interpreted as 180 days. So, no danger in either case of going over 183 days. And you would be a tourist, with no tax obligations.

If you are planning a longer stay, that will require a visa of some type. These are available to US retirees, but they typically come with the status of tax resident in that country, and may require tax payments there, in addition to any US obligations. If you go this route, there is a lot of information available about these longer visa options. 
I’m pretty sure the OP is not from the US.
correct, I'm from Europe
TXJeff
Posts: 117
Joined: Mon Sep 25, 2017 7:47 pm

Re: Europe: can you be not resident in any country for tax purposes?

Post by TXJeff »

Got it. In that case, I suggeset this website, an Official EU website with info on residence rights and responsibilties:

https://europa.eu/youreurope/citizens/r ... dex_en.htm
masni
Posts: 26
Joined: Thu Sep 04, 2014 5:56 am

Re: Europe: can you be not resident in any country for tax purposes?

Post by masni »

galepoggi wrote: Fri Jan 14, 2022 10:39 am
masni wrote: Fri Jan 14, 2022 10:21 am All 3 countries will ask for proof of your tax residency that that you have paid taxes in the other country. You cannot just say, "oh, it is not just your country". They will ask for proof that you have paid taxes on your income from the other countries.

I just choose a country that has the best tax situation for you, and make it your resident.
Yes of course I would pay taxes on income from other countries. But, if I am not resident in any of them for tax purposes, the idea would be that I'd pay taxes on Uk income in the UK, on French income in France etc.
Otoh if I am resident in one country, say the UK, I would pay taxes on income from ALLaround the world in the UK (except income from real estate rental, which in general is paid in the country where the house is).
The trouble with the first type of scenario is that I would be in a ta bracket based on the income in each coutry, thus lower than that based on the global income. So I am a bit confused about the rules and implementation. I mean, if there's on country where you work at least some of the time, it's clearly that of residence. But I will not be working (at least not paid work)
That would not work, should be a tax resident of only one country, at a minimum, so all global income should be consolidated and declared in one country. Now if some of the income is taxed at source, sure, you can declared it as taxes paid so that you are not double taxes. The way it works is for example you are a tax resident in the UK, and you get taxed in all 3 countries, but pay zero taxes in all

UK - Income is 100 euros (main tax resident)
France is 100 euros
PT - 100 euros

then you declare taxes of 300 euros to the UK and pay taxes on that

but lets say it like this

UK - Income is 100 euros (main tax resident)
France is 100 euros but paid taxes of 10euros
PT - 100 euros but paid taxes of 15 euros

You still declare your global income of 300 euros in the UK, out of which 25 euros have already been paid to other countries. So the balance of the taxes own to the UK should minus 25 euros.
Topic Author
galepoggi
Posts: 24
Joined: Sun Oct 31, 2021 2:44 am

Re: Europe: can you be not resident in any country for tax purposes?

Post by galepoggi »

masni wrote: Mon Jan 17, 2022 4:11 pm
galepoggi wrote: Fri Jan 14, 2022 10:39 am
masni wrote: Fri Jan 14, 2022 10:21 am All 3 countries will ask for proof of your tax residency that that you have paid taxes in the other country. You cannot just say, "oh, it is not just your country". They will ask for proof that you have paid taxes on your income from the other countries.

I just choose a country that has the best tax situation for you, and make it your resident.
Yes of course I would pay taxes on income from other countries. But, if I am not resident in any of them for tax purposes, the idea would be that I'd pay taxes on Uk income in the UK, on French income in France etc.
Otoh if I am resident in one country, say the UK, I would pay taxes on income from ALLaround the world in the UK (except income from real estate rental, which in general is paid in the country where the house is).
The trouble with the first type of scenario is that I would be in a ta bracket based on the income in each coutry, thus lower than that based on the global income. So I am a bit confused about the rules and implementation. I mean, if there's on country where you work at least some of the time, it's clearly that of residence. But I will not be working (at least not paid work)
That would not work, should be a tax resident of only one country, at a minimum, so all global income should be consolidated and declared in one country. Now if some of the income is taxed at source, sure, you can declared it as taxes paid so that you are not double taxes. The way it works is for example you are a tax resident in the UK, and you get taxed in all 3 countries, but pay zero taxes in all

UK - Income is 100 euros (main tax resident)
France is 100 euros
PT - 100 euros

then you declare taxes of 300 euros to the UK and pay taxes on that

but lets say it like this

UK - Income is 100 euros (main tax resident)
France is 100 euros but paid taxes of 10euros
PT - 100 euros but paid taxes of 15 euros

You still declare your global income of 300 euros in the UK, out of which 25 euros have already been paid to other countries. So the balance of the taxes own to the UK should minus 25 euros.
Thank you that was quite clear and logical and easy to understand; I always got the impression that tax rules are somewhat ambiguous and even when you do your best you always risk making mistakes; but indeed for the scenario I am contemplating it should work like you say as there should be treaties or rules against double taxation.
vsquid
Posts: 123
Joined: Sat May 18, 2019 2:24 pm

Re: Europe: can you be not resident in any country for tax purposes?

Post by vsquid »

You also need to check what the laws of your country of citizenship say. Many countries have blocked this loophole by declaring that they will assert full taxation right over their citizens in case they are not tax resident in any country.
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