travelling and taxes

[yadayada]

Let's say the longest I stay in one place in a given year is 4 months. Im Dutch. Where would I be taxable on my capital gains that year? The place where you stay longest? Normally you have to stay somewhere for more then 183 days. My accountant couldnt asnwer this.

 

I am assuming that if you stay somewhere for longer then 183 days, then they can could possibly claim taxes from you, because that is usually the period where you are liable for taxes. So if you dont stay anywhere for longer then 183 days, then technically your in some sort of tax limbo?

[randomep]

Let's say the longest I stay in one place in a given year is 4 months. Im Dutch. Where would I be taxable on my capital gains that year? The place where you stay longest? Normally you have to stay somewhere for more then 183 days. My accountant couldnt asnwer this.

 

I am assuming that if you stay somewhere for longer then 183 days, then they can could possibly claim taxes from you, because that is usually the period where you are liable for taxes. So if you dont stay anywhere for longer then 183 days, then technically your in some sort of tax limbo?

 

Well that's related to my post, I was asking the same thing. Although, between two countries you have to stay somewhere more than 6months.

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/canadaus-cross-border-issues/

 

I think people here are a bit shy to give legal or tax advice.

 

I'll just say for my case I think of it this way. It just depends on the country of the brokerage. I assume that your address for that brokerage is in the same country. That country would expect to collect taxes on that account. That's generally what I do now, just pay the taxes to the country of the account. I don't have that much taxes that the government would protest anyway.

 

 

[yadayada]

it is different for US citizens tho. I think you still need to pay taxes above 90k$ right? And you need to be out of the country for longer then 330 days a year I think.

For europeans, if your not in the country for longer then 183 days, then you are not taxed there. Especially with something like capital gains. The problem ofcourse is that tax authorities are going to expect you to prove it if you get audited.

[scorpioncapital]

In Canada it's pretty simple. You pay taxes to Canada as long as you have ties to that country when you're travelling. For all intents and purposes I consider this definition to consist of two things:

 

1. You are travelling on a tourist visa even if you travel for years on end (although you can never stay put very long.)

 

2. You are financing the travel from money in your "home" country and continue to pay your bills at home. This last point is a bit murky. What if you have no house to rent or own or car, just bank accounts and medical care and a phone? Well, I think that would be fine given that your money centre is still your home country.

[randomep]

it is different for US citizens tho. I think you still need to pay taxes above 90k$ right? And you need to be out of the country for longer then 330 days a year I think.

For europeans, if your not in the country for longer then 183 days, then you are not taxed there. Especially with something like capital gains. The problem ofcourse is that tax authorities are going to expect you to prove it if you get audited.

 

I think the problem that isn't mentioned is double taxation. If you say the IRS wants a cut no matter what and you paid taxes say in Canada, then you can deduct what you paid to Canada from your IRS because Canada/US have a tax treaty. And it is a simple short doc so there is lots of issues up to intereptation. Basically between the two countries you'll pay the higher tax rate but not double taxation.

 

This is all based on my understanding and I am not a lawyer nor accountant :)

[randomep]

In Canada it's pretty simple. You pay taxes to Canada as long as you have ties to that country when you're travelling. For all intents and purposes I consider this definition to consist of two things:

 

1. You are travelling on a tourist visa even if you travel for years on end (although you can never stay put very long.)

 

2. You are financing the travel from money in your "home" country and continue to pay your bills at home. This last point is a bit murky. What if you have no house to rent or own or car, just bank accounts and medical care and a phone? Well, I think that would be fine given that your money centre is still your home country.

 

Really? is this person for real? if so what does he use for an address in all the medical statements, bank statements , bills etc.

 

 

[oddballstocks]

it is different for US citizens tho. I think you still need to pay taxes above 90k$ right? And you need to be out of the country for longer then 330 days a year I think.

For europeans, if your not in the country for longer then 183 days, then you are not taxed there. Especially with something like capital gains. The problem ofcourse is that tax authorities are going to expect you to prove it if you get audited.

 

I think the problem that isn't mentioned is double taxation. If you say the IRS wants a cut no matter what and you paid taxes say in Canada, then you can deduct what you paid to Canada from your IRS because Canada/US have a tax treaty. And it is a simple short doc so there is lots of issues up to intereptation. Basically between the two countries you'll pay the higher tax rate but not double taxation.

 

This is all based on my understanding and I am not a lawyer nor accountant :)

 

My understanding is that as an American you are required to pay the IRS no matter where you live and what you earn.  Most developed countries have tax treaties that credit foreign taxes against US taxes, but that's not always the case.  As long as you were born in the US you will always be chained to Uncle Sam.  That is unless you renounce your citizenship, and then you still have to pay taxes for the next five years, plus a hefty exit tax.

 

Our system ensnares a lot of people unknowingly.  If a foreign couple is living in the US and has a child here then moves away without the intent to return the child is an American and is required to file US taxes their entire life.  Even if the person never intends to come to the US again.  If they fail to file they might not be able to set foot here without being charged for tax evasion.

 

Unfortunately this is the hand we're dealt, and I doubt it is going to get any more liberal in the coming years.  Based on what we've seen recently the US is only getting more restrictive.  To the point where current laws and regulations make movement of capital outside the US difficult.  It's hard to find a foreign bank or foreign broker willing to work with Americans.  I have asked various foreign brokers if they'll take Americans as customers, their policy is they will take foreigners, but not Americans, it's frustrating.

[Otsog]

Canada taxes the worldwide income of Canadian residents

America taxes the worldwide income of American citizens

Netherlands taxes the worldwide income of ??? (sorry I don't know)

 

The Canada Revenue Agency mainly looks at your 'Significant Residential Ties' and 'Secondary Residential Ties' to determine if you have broken residency (http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s5/f1/s5-f1-c1-eng.html#N102D3).

 

To ditch the long-arm of the IRS you have to give up your citizenship, à la http://money.cnn.com/2012/05/11/technology/eduardo-saverin-facebook-citizenship/

 

 

Edit:

 

Netherlands taxation is residency based as well: http://en.wikipedia.org/wiki/International_taxation

Only America and Eritrea tax based on citizenship

 

 

 

 

 

 

[Otsog]

Let's say the longest I stay in one place in a given year is 4 months. Im Dutch. Where would I be taxable on my capital gains that year? The place where you stay longest? Normally you have to stay somewhere for more then 183 days. My accountant couldnt asnwer this.

 

I am assuming that if you stay somewhere for longer then 183 days, then they can could possibly claim taxes from you, because that is usually the period where you are liable for taxes. So if you don't stay anywhere for longer then 183 days, then technically your in some sort of tax limbo?

 

183 days is only one facet of determining residency.  Above 183 days is usually the point where it becomes automatic and you don't have to consider anything else, but if you are sub-183 days then countries will start to look at where you dwell, where your spouse or dependents live, where your bank accounts are, where your drivers license is issued from, where you have medical coverage. 

 

I don't know specifically what the Netherlands looks at, but you should check it out for each country you will be in. 

 

What country is your bank branch in?  They will likely send your investment information to that countries tax authority. 

[nodnub]

There are some people that claim to do this. You can google "perpetual traveler" or "permanent tourist".  You might be able to get away with it but that is not to say that you should try. I think you would risk charges of tax evasion. Are you prepared to pay the penalties and back taxes if and when you get caught in the future?

 

Before wasting any time on it, I would recommend speaking with a reputable chartered accountant in your country that specializes in international or off-shore tax issues. Get their opinion which will be specific to your current home country and the countries you intend to travel to.

 

Here are some details specific to Canadians. I have read that if you leave Canada as a perpetual world traveler, and do not become a resident of another country, then you remain a Canadian resident for tax purposes.

 

My guess is that the only way you can achieve this legally is by moving to a country without capital gains taxes and give up residency in your home country.

[yadayada]

well i dont do it to evade taxes. I just want to travel :) . And not pay any taxes I dont have to.

[ERICOPOLY]

As long as you were born in the US you will always be chained to Uncle Sam.  That is unless you renounce your citizenship, and then you still have to pay taxes for the next five years, plus a hefty exit tax.

 

The exit tax has an exception (to avoid the tax).  People who have been dual citizens since birth do not have to pay the exit tax as long as they are going "back" to that other country.

 

I'm pretty sure I qualify for that as long as I go to Australia.  This is because I have Australian citizenship by descent.