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Hi Folks
This is an interesting and serious question.
I’m looking for feedback and comments on the prospect of becoming a legal non-tax resident and using valid legal structures to have an ‘international’ lifestyle and legally pay no tax on my business and personal income.
Currently I am a legal tax resident of Australia with dual Australian and New Zealand citizenship.
FYI the Corporate Tax Rate is 30% and the Individual Tax Rate is usually between 30 to 40% depending on your income as seen here https://www.ato.gov.au/Rates/Individual-income-tax-rates/
I have friends living in Dubai primarily for the tax benefits and have enjoyed visiting them and whilst I find the place interesting it’s not a place I would ideally choose to live for many reasons.
My ‘Tax Free Lifestyle Formula’ involves some simple premises as follows –
1. Leave Australia Permanently. I would even go so far as to sell my house, my car and dispose of all significant assets except for a few things I may leave with friends and family such as books, CD’s, movies, backup computer and backup hard drives.
2. Never stay anywhere long enough to be classified a tax resident.
3. Incorporate a new company, legally, in a tax haven such as the Cayman Islands where I legally pay little to no tax on my income.
4. ‘Live’ in at least four countries each year for an average of three months ensuring compliance with number 2 above.
Form the date I leave Australia permanently I am no longer a Tax Resident as seen here –
https://www.ato.gov.au/Individuals/International-tax-for-individuals/Work-out-your-tax-residency/
My business is internet based and is structured around what I consider to be ‘The Ultimate Business Model’. All I need to make money is a laptop and an internet connection. I have excellent, diligent, hard-working staff (mostly in the Philippines) that have worked for me for years but I have never met them even though we talk most business days on Skype.
Not that it’s particularly relevant to these tax questions but if you’re interested I have multiple businesses offering the following services –
· Digital Marketing Agency selling Website, SEO and Social Media services.
· Internet Based Employment Portal to find and hire excellent staff at incredibly low ‘western world’ prices of between $2 to $5 per hour.
· Digital Publishing Company that produces and sells digital magazines and information products.
· Internet based Affiliate portal that allows affiliates to easily earn substantial lifetime passive residual income off not only all of our products but any products they may care to produce and have resold also.
· Email Marketing and Autoresponder internet based services company.
· Numerous other ventures including telecoms etc.
In the past I’ve made over $300k in a good year and paid the required $100k plus in tax to the ATO. I’ve done the right thing but it’s a lot of money to ‘give’ away. I will be doing some ‘Product Launches’ in the coming months in the ‘Internet Marketing’ community using valid and appropriate marketing techniques such as ‘Highly Compelling Offer’ and ‘Viral and Affiliate Marketing (Joint Venture) Strategies’ with the intention of raising my income to millions of dollars per year on-going so the tax issue becomes much more significant.
I’d like to spend three months per year in the good ol’ USA where I have lived previously on a number of occasions and have many good friends. I should be able to stay for around three months per year (possibly up to four but have to leave after three months based on my travel VISA) according to http://www.irs.gov/Individuals/International-Taxpayers/Substantial-Presence-Test
I’d like to spend three months a year in various European countries such as the Netherlands, Spain, Italy, Greece etc.
I’d like to spend three months a year in various South American countries such as Venezuela, Peru, Mexico, Brazil, Puerto Rico etc.
I’m assuming I could even come back to Australia for three months per year (potentially up to six) on holiday to visit family and friends according to this 183 day test –
https://www.ato.gov.au/Individuals/...etail/Residency/Residency---the-183-day-test/
Note there is one question that I am answering ‘Yes’ to that has some potential legal ambiguity:
“Are you an Australian resident who is emigrating to live permanently in another country?”
I’m answering yes to this assuming this is true even if another country is equal to other countries (plural).
I’d like to be clear my intentions are to have fun travelling the world making millions LEGALLY paying no tax.
I am NOT interested in being sued by the ATO (Australian Tax Office) or equivalent foreign body such as IRS (Internal Revenue Service USA) at any time in future because they ‘don’t like’ what I’m doing.
There are a number of what I assume are legitimate companies offering business registration services in the Cayman Islands and other Low or No-Tax destinations. I will have to rent a virtual office and employ proxy services that may cost a few thousand dollars per year.
The only downside I see of little concern is that I have to live a semi-nomadic lifestyle moving from country to country but I see that as relatively easy and a little exciting in the modern world with services such as AirBnB. I’ll need to maintain relatively good travel insurance – no big deal, and worst case scenario if I ever have a significant health concern I may need to return to Australia or New Zealand.
Note that I will be earning income from Australian customers and potentially a lot of income from American customers if that is somehow relevant.
Do countries get upset if you are specifically trying to be a non-tax resident of any nation and go after you?
I knew a guy who did this years ago mainly between just New Zealand and Australia by staying under six months in each but I lost touch with him.
Please feel free to chime in with your thoughts and feedback.
Is this a good idea, a great idea or do I have flaws in my premises?
With thanks
Sean
This is an interesting and serious question.
I’m looking for feedback and comments on the prospect of becoming a legal non-tax resident and using valid legal structures to have an ‘international’ lifestyle and legally pay no tax on my business and personal income.
Currently I am a legal tax resident of Australia with dual Australian and New Zealand citizenship.
FYI the Corporate Tax Rate is 30% and the Individual Tax Rate is usually between 30 to 40% depending on your income as seen here https://www.ato.gov.au/Rates/Individual-income-tax-rates/
I have friends living in Dubai primarily for the tax benefits and have enjoyed visiting them and whilst I find the place interesting it’s not a place I would ideally choose to live for many reasons.
My ‘Tax Free Lifestyle Formula’ involves some simple premises as follows –
1. Leave Australia Permanently. I would even go so far as to sell my house, my car and dispose of all significant assets except for a few things I may leave with friends and family such as books, CD’s, movies, backup computer and backup hard drives.
2. Never stay anywhere long enough to be classified a tax resident.
3. Incorporate a new company, legally, in a tax haven such as the Cayman Islands where I legally pay little to no tax on my income.
4. ‘Live’ in at least four countries each year for an average of three months ensuring compliance with number 2 above.
Form the date I leave Australia permanently I am no longer a Tax Resident as seen here –
https://www.ato.gov.au/Individuals/International-tax-for-individuals/Work-out-your-tax-residency/
My business is internet based and is structured around what I consider to be ‘The Ultimate Business Model’. All I need to make money is a laptop and an internet connection. I have excellent, diligent, hard-working staff (mostly in the Philippines) that have worked for me for years but I have never met them even though we talk most business days on Skype.
Not that it’s particularly relevant to these tax questions but if you’re interested I have multiple businesses offering the following services –
· Digital Marketing Agency selling Website, SEO and Social Media services.
· Internet Based Employment Portal to find and hire excellent staff at incredibly low ‘western world’ prices of between $2 to $5 per hour.
· Digital Publishing Company that produces and sells digital magazines and information products.
· Internet based Affiliate portal that allows affiliates to easily earn substantial lifetime passive residual income off not only all of our products but any products they may care to produce and have resold also.
· Email Marketing and Autoresponder internet based services company.
· Numerous other ventures including telecoms etc.
In the past I’ve made over $300k in a good year and paid the required $100k plus in tax to the ATO. I’ve done the right thing but it’s a lot of money to ‘give’ away. I will be doing some ‘Product Launches’ in the coming months in the ‘Internet Marketing’ community using valid and appropriate marketing techniques such as ‘Highly Compelling Offer’ and ‘Viral and Affiliate Marketing (Joint Venture) Strategies’ with the intention of raising my income to millions of dollars per year on-going so the tax issue becomes much more significant.
I’d like to spend three months per year in the good ol’ USA where I have lived previously on a number of occasions and have many good friends. I should be able to stay for around three months per year (possibly up to four but have to leave after three months based on my travel VISA) according to http://www.irs.gov/Individuals/International-Taxpayers/Substantial-Presence-Test
I’d like to spend three months a year in various European countries such as the Netherlands, Spain, Italy, Greece etc.
I’d like to spend three months a year in various South American countries such as Venezuela, Peru, Mexico, Brazil, Puerto Rico etc.
I’m assuming I could even come back to Australia for three months per year (potentially up to six) on holiday to visit family and friends according to this 183 day test –
https://www.ato.gov.au/Individuals/...etail/Residency/Residency---the-183-day-test/
Note there is one question that I am answering ‘Yes’ to that has some potential legal ambiguity:
“Are you an Australian resident who is emigrating to live permanently in another country?”
I’m answering yes to this assuming this is true even if another country is equal to other countries (plural).
I’d like to be clear my intentions are to have fun travelling the world making millions LEGALLY paying no tax.
I am NOT interested in being sued by the ATO (Australian Tax Office) or equivalent foreign body such as IRS (Internal Revenue Service USA) at any time in future because they ‘don’t like’ what I’m doing.
There are a number of what I assume are legitimate companies offering business registration services in the Cayman Islands and other Low or No-Tax destinations. I will have to rent a virtual office and employ proxy services that may cost a few thousand dollars per year.
The only downside I see of little concern is that I have to live a semi-nomadic lifestyle moving from country to country but I see that as relatively easy and a little exciting in the modern world with services such as AirBnB. I’ll need to maintain relatively good travel insurance – no big deal, and worst case scenario if I ever have a significant health concern I may need to return to Australia or New Zealand.
Note that I will be earning income from Australian customers and potentially a lot of income from American customers if that is somehow relevant.
Do countries get upset if you are specifically trying to be a non-tax resident of any nation and go after you?
I knew a guy who did this years ago mainly between just New Zealand and Australia by staying under six months in each but I lost touch with him.
Please feel free to chime in with your thoughts and feedback.
Is this a good idea, a great idea or do I have flaws in my premises?
With thanks
Sean
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