Do you need a work permit in an tax free country?

MikeGreo Active member

40POSTS

5 years ago

Might be a stupid question, but does one need a work permit in a tax free country?

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cccmedia Ecuador/Colombia Expert

10285POSTS

5 years ago

Are we talking about income taxes, Mike?

Bermuda, the Bahamas, Andorra, Monaco and the U.A.E. are among the most popular countries that do not tax incomes, according to Investopedia.

Which country or countries are you interested in, Mike?

cccmedia

cccmedia Ecuador/Colombia Expert

10285POSTS

5 years ago

Common sense tells one that the level of taxation and the right to work may not be directly connected in many countries.

UK Mike's profile tells us he is potentially interested in the U.S.A., though he did not say he would seek citizenship in a particular country.聽 The U.S.A. taxes its citizens on worldwide income regardless of whether they have chosen to Expat to another country.聽 The U.S.A. excludes more than $100,000 annually in earned income (the amount typically changes each year) from its Expats' tax basis.

cccmedia

MikeGreo Active member

40POSTS

5 years ago

Yes, talking about income taxes as it is pretty much the only type of tax that has such an effect.

cccmedia Ecuador/Colombia Expert

10285POSTS

5 years ago

How about Malta?聽 I see that you have posted about that.聽 And the Cayman Islands.聽

You may get better guidance if you reveal/clarify your country or countries of interest.

cccmedia

MikeGreo Active member

40POSTS

5 years ago

I am interested in any country/countries which would allow a digital nomadic lifestyle and maximize the possibilities of living tax free or in a low tax country. Ideally becoming tax residence in a country like Cayman Islands, Bermuda, Barbados etc. That would聽 be the base and a second country and possibly third country both of which are where I wouldn't become tax resident if I stayed less than 6 months or 3 months etc. Also I was thinking if a person goes to a tax haven or travels between tax havens, than what is the risk?

cccmedia Ecuador/Colombia Expert

10285POSTS

5 years ago

Do you require that the residents of a your new countries speak English?

If so, you may wish to visit Wikipedia's list of countries and territories where English is spoken -- easily googled.

If English is not your requirement, consider Colombia, especially Medell铆n, where digital nomad Expats are especially welcome.聽 (Just live in a metropolitan area and avoid nighttime travel in that 'rep煤blica' .. and pick a good sector such as Poblado.).聽 Colombia meets your requirement to avoid taxation as a tax resident by being in-country six months or fewer per year.

cccmedia

MikeGreo Active member

40POSTS

5 years ago

Yes, I would be looking to live in a country where English is being widely used.

atomheart Serial expat

614POSTS

5 years ago

cccmedia wrote:
Colombia meets your requirement to avoid taxation as a tax resident by being in-country six months or fewer per year.

Are you sure about that?

In Colombia, a foreign individual is generally liable for tax on income and property sourced or situated in Colombia, only to the extent that the individual is not considered as resident for tax purposes (remain in the country/jurisdiction less than 183 days). For foreign taxpayers who are resident for fiscal matters, tax is levied on net income and applied at progressive rates. For non-resident taxpayers, income tax is levied on gross Colombian income at a flat /!\ I AM A STUPID SPAMMER /!\5 percent.
...
Taxpayers who are considered non-resident for fiscal matters, are liable for tax in Colombia only on income derived directly or indirectly from a Colombian source.

Definition of source
Employment income is generally treated as Colombian-sourced compensation where the individual performs the services while physically located in Colombia.

MikeGreo Active member

40POSTS

5 years ago

#10

Well I was thinking remote working for a foreign(non-Colombian) company. But if being physically present in Colombia makes the income Colombian source, then in terms of taxes its not going to be good.

atomheart Serial expat

614POSTS

5 years ago

#11

MikeGreo wrote:
But if being physically present in Colombia makes the income Colombian source

I'm yet to find a country that defines the source of income differently. Just think about it, how easy it would be to dodge taxes, all employees would be paid from a foreign entity and problem solved.聽

beppi Germany/Singapore Expert

15637POSTS

5 years ago

#12

Of course the topics of how much income tax a gouvernment wants from its residents and whom it wants to let into the country are unrelated - but for your actual issue these are also besides the point:
International taxation is a very complex matter, as all rules are national and do not complement each other. Also few governments have an interest in attracting people working for foreign (and therefore uncontrollable) employers and not contributing to the local tax base. Therefore, double taxation is far more likely than no or low taxation - if you stay within the laws of the places you stay and work in (which many self-declared "digital nomads" do not and are thus illegal and, since they attempt to take the benefits without contributing their fair share to the hosting society, also morally dubious).

MikeGreo Active member

40POSTS

5 years ago

#13

Thanks for the response.

I don't agree with this idea of "their fair share to the hosting society, also morally dubious".

I've lived in the UK and been paying taxes and, I don't know what benefits you talking about.

A person can perfectly live in a country without taking benefits. Also obviously when as digital nomads talk about living in many countries, nobody intends to claim any benefits, thus the insistence of remaining non-tax residence.

The house prices, rent prices, transport prices are ridicilous in this country. We pay more than any other country for transport.

We also pay VAT. I hope people haven't misunderstood, when referring to taxes not talking about VAT, only income tax.

If a country requires me to have medical insurance, or I need some kind of private healthcare, after saving so much from taxes that won't be a problem.

Many countries need foreigners to come into the country. Because this help boosts the economy. Just read about how many countries such as Cayman Islands have started a Global Concierge Citizen Program because Covid happened and the economy has been negatively affected. Cayman Islands is just one of them. Many of the countries have done similar programs in an attempt to increase expenditure in the country. According to their programs they just require the person to be a remote worker i.e. they are self-sufficient and won't be taking away any local jobs from the local citizens.

So I don't understand when people talking about how we "need to contribute to our fair share" or as if it is "morally dubious" somehow.

If anything the whole concept of the income tax is very morally dubious. According to the U.S. Constitution the income taxes were not even legal until the 16th Amendment in 1916. There are many people contesting against it.

The idea that a person works from the sweat off their brow and the governments wants such a large slice of the pie, I find that very morally dubious. Meanwhile corporations that should be the ones giving their fair share of the taxes usually are cutting taxes and using loopsholes and we are talking millions if not billions in those cases. The governments are always bailing out the banks and big corps.

So I don't think governments are in a place to talk about morality, when such cesspools exist.

A large part of the US and UK taxes are spent on murdering people in the neverending cycles of war. Where do you even think most of the money is going to? In addition to the military budget, U.S. treasury also can't account for 21 millions dollars that is missing.

beppi Germany/Singapore Expert

15637POSTS

5 years ago

#14

MikeGreo wrote:
A person can perfectly live in a country without taking benefits.

How do you live in a country without using its (publicly funded) roads, electricity grid, health system, the safety provided by its police and army, its social stability, cultural life, etc. etc. etc.?
It is a basic rule of most reasonable countries that the government provides all these for everybody to use - and that taxes and other dues (which are, at least in democratically run countries, decided on by the majority of the population) are collected to make this possible.
Your post confirms my suspicions that you, like many self-declared "digital nomads", egoistically want to take the benefits without fulfilling your part of the bargain. This takes a certain arrogance.

MikeGreo Active member

40POSTS

5 years ago

#15

As I mentioned regarding the health system, there is always private options. The health system in the UK for example has become utter shambles, not even worth the tax payers money anymore. You ask to see the doctor and you wait 9 months or when you do finally see the doctor you can just ask one question relating to your health concern, any other concern and you need a separate appointment. So endup paying to private doctors anyway, so than its a loss.

***since the pandemic happened, less and less people are trusting the police.

The cultural life is mostly paid anyway. Anywhere you go...restaurants, cinema, entertainment venues, leisure centres, gyms, we all pay for that. Tax-resident or not not makes no difference.

You make it sound like the country is providing all these services for free.

Anyone who is using electricity without a doubt knows that it comes with utility bills to pay. Same with water. In fact, the larger the customer base(i.e. the population), the more the electricity companies are making money. Same can be said with the wifi and internet.

You might say, how is it fair when one country's citizens pays less taxes than another country that pays more. Maybe they shouldn't visit. And then one might say, what if they decided to visit every year? Are we to question their morality now because they might be working remotely during their stay? What if they decide to visit twice in a year? Should we say "how terrible of them?"

A digital nomad at the end of the day is very similar to a frequent traveler. But people don't get upset at frequent travelers, they praise them for their contribution that they bring when they spend in the country. People seem to dislike digital nomads for doing the same thing, only because of their intention. Perhaps jealousy.

You're leaving out crucial information like the benefits that foreigners bring in to a country.

On this God given planet, it seems like we need to pay for just being alive. Next thing you know they are going to tax the air that we breathe.

Moderated by Priscilla 5 years ago
Reason : inappropriate comment

cccmedia Ecuador/Colombia Expert

10285POSTS

5 years ago

#16

Bilingual accountant Paula Cruz of Medell铆n says only 4-million of 50-million people in Colombia (eight percent) pay income taxes.聽

She says most of the Expats she advises pay little or nothing in such taxes, partly due to the credit they get for paying income taxes in a home country.

Cruz was interviewed on the channel 'How to Expat' in a segment called Taxes in Colombia in which she made the above remarks.聽 Her contact information is listed in comments shown below the video.聽 The interview was recorded in February 2020, shortly before the worldwide pandemic.聽 She is credited by the site as being the best known accountant for Expats in the city.

---

Yours truly receives no compensation for bringing this accountant to your attention.

search at YouTube:聽 how to expat taxes in Colombia accountant Medellin

cccmedia

beppi Germany/Singapore Expert

15637POSTS

5 years ago

#17

You are obviously delusioned about the importance of good government: Even though you pay for a ticket to a concert, museum or zoo, it is still heavily subsidized by the state. The same is true for private health systems (and not all public ones are as bad as your county鈥榮). For the cost of running private educational institutions without public subsidies, look to the fees of USA鈥檚 most expensive boarding schools and universities - and even they would cost more without donations from the industry. Try staying in a place where the (non-functioning) authorities do not provide all this - e.g. Somalia, Afghanistan or Libya (no taxes there, I am sure, but you pay more in bribes just to survive!).
You are trying to justify it for yourself. But you are wrong!

beppi Germany/Singapore Expert

15637POSTS

5 years ago

#18

cccmedia wrote:
Bilingual accountant Paula Cruz of Medell铆n says only 4-million of 50-million people in Colombia (eight percent) pay income taxes.

The situation is similar in Thailand (which is certainly not democratic and in some respects resembles a failed state), at approx 10% tax-payers - due to an extreme disparity between rich and poor, a huge informal economy and widespread graft.
When I lived there, I belonged to the 5% highest earners in the country (although my salary was lower than what I would have gotten for the same job in Europe). The income tax rate is pretty high at that level, in line with what Western European countries charge (where you get far more in functioning public services). But it is not up to me to question their system, their rules and how they conduct the business of managing their country - as a guest, I have to follow (and not break their laws). And if I don't like it, I must stay away. Everything else would be bigotry.