183 Days Myth (Tax Residency Misconception)
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- Опубліковано 26 лют 2022
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When talking about tax residency many people think that the 183-day rule is the golden standard, and this is the amount of time you need to spend in a country in order to become a tax resident.
Is this really the case? Do you automatically become a tax resident when you spend 183 days in a country? Can you become a tax resident even if you spent less time? Are there other criteria that may be more important when the country determines whether you're a tax resident or not?
Today we are debunking the 183 days myth about tax residency.
Terms that we will be covering:
-Residency
-Tax Residency
-Tax Residency Certificate
-Tax Return
-Taxable income
-183 days
-Tax Status
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Author: Michael Rosmer
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Nice, definitely love this type of "this is the law but this is practice in reality" content!
Keep it up!
Haha it's not the law everywhere. The rules differ from country to country. It is just a common misconception.
Any ideas on what topic we should cover next?
Great content yet again! Thanks for sharing!!!!
Always our pleasure!
Were you aware of this misconception? What are your thoughts?
'Glad I discovered your informative videos! I've subscribed and will no doubt make my way through them. Question: as a tourist, if I were to split every year's residency 60/40 between the Republic of Georgia and say Vietnam (or elsewhere in SEA), do you think any government would approach me for taxes? I'd be spending slightly more than 183 days in Georgia. From what I understand, Georgia will not come after you for taxes even if you live there year round as long as your income is not Georgia-derived (true?). And I've never heard of perpetual tourists in Vietnam (doing visa runs as needed) who have ever paid taxes to Vietnam regarding their laptop-derived income from elsewhere. Thanks.
Any thoughts on St. Kitts and Nevis bring tax free havens, have you done a video on this? Thx Michael, great work as usual!
Another good video. I was surprised to see that I wasn’t subscribed, became a SUBSCRIBER. IMHO there’s no one size fits all, as you said. The rule of thumb I follow is not to spend over 6 months in a country that I don’t have tax residence. In the US a lot of people confuse green card rules with tax regulations. It’s not a green card, it’s a “resident alien permit.”As the name says, you have to be resident. I’m not sure how USCIS defines residence in terms of how much time you are required to spend in the US. Lots of people think as long as they pay US taxes, but live outside of the US with their greensand then they are OK. Def not the case, 2 separate agencies in the US that don’t necessarily communicate. Just an opinion.
Thanks for subscribing and sharing your experience!
Any countries you're planning on visiting this year?
Have you done a video specifically on a US citizen working remotely in Spain?
When does the 183 days rule don’t apply to you after leaving the country ?
Very interesting. I am currently doing short term contract work in the UK via an umbrella company. I'm wondering if I could buy a property in Europe in a country with lower taxation and work between the two countries. Are you aware of any international umbrella companies that would support a client in the UK but pay me in another country? (I don't know if the client would pay a business set up in another country)
How do you know if a country will make you tax residence (and that is not something you are looking for)?Is it a rule thing or more of a practical thing?
IMHO, you should consult a competent tax attorney specializing in the field. But even if you never planned on becoming a tax resident and you’re in the country for over 6 months, the country might consider you to be a tax resident and ask you to start paying taxes. You might respond that you pay taxes in your home country, or you might not. Then you will ask yourself, why didn’t I speak with a tax professional earlier.
The high-tax countries (like Spain) will do their best to entrap you in their tax net; they've got a series of "tests", and you've got to pass all of them in order to AVOID being caught up in the tax net (for example, renting an apartment year-round could count against you, as would owning a car in the country at issue).
Hey,
For UK and a european country if I stay more than 183 days as a UK citizen is a tax residency change a requirement? I hold a resident permit in Bulgaria. My concern is that if my tax residency changes do I pay tax from day 184 or do I have to pay the last 183 days tax in Bulgaria.
You could be taxable in both
@@OffshoreCitizen Bulgaria has a tax treaty with UK. But the concern I have is after 183 days am I due to pay taxes in bulgaria from day 184 or for the last 183 days
Do you know if Portugal apply the 183 day rule ?
I don't have a complete answer, but in order to maintain legal residence in Portugal, I think you either have to stay in the country for a full 6 months (D7 visa), or else have a "golden visa". So under a D7 visa, I don't think there's any way to avoid being tax resident.
Correct.
And also you don't need to be in Portugal 183 days to be tax resident
Regarding Thai and U K agreement, it appears Article 4 is about where you have a home property and provided income which determines where you are resident. I saw nothing regarding amount of days. In Thailand I have to achieve yearly visas and are therefore not a resident. If the Thai gov wish to cancel the agreement it appears a significant period of notification should be provided to the U K gov.
Needing a yearly visa doesn't not make you a resident
I stand corrected sir. This is very confusing to a lay person. So the U K agreement appears to tell me I am a tax resident (Fiscal Domicile) due to the fact I own a home and receive PAYE income and Pension in the U K and consider it so. It mentions nothing of amount of days in article 4.
I am also considered a tax resident by Thailand if I spend over 180 days in Thailand. Although it is not as I would wish, the only sensible conclusion to avoid a tax headache is indeed as many mention, to not be in Thailand more than 180 days. Can a law firm or accountant take the headache away and at what price as I prefer to spend over 180 days in Thailand.
What if i have my centre of all vital interests in one country (house, car, memberships, perhaps family etc) but my main source of income is from working physically in another country (through self employment or ltd company), with zero ties? In neither country do i stay physically more than 150 days a year. This is where it gets complicated...
Depends on the countries
@@OffshoreCitizen living in romania with romanian microcompany, work performed in germany
What do you think about Hungary? I hear theres a 15% flat tax for crypto.
Not just for crypto. And Hungary is ok if you're ok with 15%
Hungary is the worst regarding tax. At the moment, there is 40% tax if you're a self employed.
Michael, does that mean that if I want to get a tax return, I can go and stay in any low or zero tax country for a **little** while, say, a month in a hotel or airbnb...
then file a tax return, insisting that "I want to pay some tax here (could be a zero tax too, right?)"
and then use that tax return to my advantage in other places whenever there'll be a need?
That might work if you have a residence permit in the country; but then the next question becomes that of what it takes to obtain the residence permit in the first place, and what it takes to MAINTAIN the residence permit.
@@dlukton How can it "might work"? I WANT to pay a tax, even if I'm a tourist. "Take my money and shut up". What country wouldn't allow me to pay a tax?
And, I guess, that might even be zero tax, for which I'd get a tax return as well. Not?
And I might do that in multipe low or zero tax countries, just in case, to obtain more tax returns. Huh?
Dlukton is correct. You'd still need a residency permit and proof of address to make it work just being a tourist wouldn't cut it.
@@OffshoreCitizen well, I've obtained tax ID number in 2 countries now, as a tourist. How was that possible then? I've not paid any taxes there because I don't live there, but only visit them occasionally.
@@longgamma3341 OK so let's say that you go into country "X" as a tourist; you're able to get a taxpayer ID, and you file a tax return; and then you go into country "Y", and you tell the government: "sorry, I've already paid taxes in country X". The government of country Y could demand to see your residence permit for country X; and the govt of country Y might also contact the tax authorities in country X for information about you. And bear in mind, the govt of country Y is holding a residence permit over your head; if you refuse to pay the tax that they think you should pay, they could cancel your residence permit.
I have a weird question. I have been in the Philippines for over 2 years now. Yet the tax office here still won't recognise me as a tax resident just because I'm on a tourist visa. Any ideas on how to fix this? Else I don't know where else to be a tax resident.
Just dont be a tax resident anywhere...that way you arent contributing anything to western criminal.govts..
..I'm going through the same question here as well
But everything iv read says.. Philippines don't tax ..non citizen..or alian permanent resident..on OVERSEAS income
...iv ask the Australian tax department.and basically there's no clear answer..
The way iv been told..cut all ties with Australia..no car rego no joining car clubs ..no . nothing..
..when I'm in Philippines get a long time rental agreement
Car . licence. Car rego bike rego in your name..joing a local motor bike club
Staying a two or three years ..
Basically make ties in new country..
It's impossible to get a resident visa in any of the Asian countries
??? Get married.have a kid or 12.. will definitely make a strong case that you have ties to the Philippines
Is this 183 days is consecutive days in a year ?
Overall
Which countries exactly?
Each country has a specific set of rules. What is your question referring to?
@@OffshoreCitizen
If I spend 179 days in Bali - still have to pay taxes? What about Thailand and Sri Lanka ? THANKS 🙏🏼
?
@@thankyouand3260 im also interested in Bali and Thailand.
This comment will save your 5 mins 6 secs: 183 Days Concept can be true or wrong (depends), so be careful.