Busting The Biggest Myth About Double Tax Treaties: A Tax Expert's Perspective

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Күн бұрын

Today we are debunking some of the biggest double tax treaties myths out there.
☎️ Book a call with Michael:
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Most people believe that if they pay taxes in country A, they will not be taxable in country B, however, this is not always the case.
First of all, it is important to clear up that double tax treaties are considered to be agreements of the avoidance of double taxation. The emphasis is on double taxation.
If you're dealing with two countries at the same time this is how it will work: You will pay taxes in your country of residence, as your country of residence has the first taxing rights. If you earn income from another country, you will need to provide that you paid taxes in your first country and if the tax rate is higher you will be paying only the difference in the second country. This is of course a big generalization but you get the idea.
You will typically end up paying higher tax rate of the two.
So, what does a double tax treaty do for you? The biggest thing is that the double tax treaty clarifies where are you a tax resident in the first place. Tax treaty will explain where are you taxable, even if you're dealing with multiple countries. This can add another degree of certainty if you're moving or dealing with more than one country.
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Introducing Michael Rosmer, the true modern-day Renaissance man and international entrepreneur, who has been mentored under top international tax attorneys.
He is widely regarded as the foremost international tax expert for legal cross-border tax planning, with extensive experience in immigration, residency, and second citizenship for those seeking a plan B, asset protection, global offshore banking, and payment processing.
Michael leads a team of lawyers and accountants who are top experts in their respective fields. This multi-lingual, multi-national team has worked with digital nomads, entrepreneurs, and investors from 62 countries, providing practical real-world multi-dimensional solutions for their clients.
At Offshore Citizen we understand that each individual's situation is unique. Unlike most industry service providers, we do not push any particular country or solution. Instead, we analyze your individual situation and custom-tailor the best countries and strategies for you, drawing on every part of the globe.
With Offshore Citizen, you can rest assured that you are in the hands of professionals who have your best interests at heart. Let us guide you through the complex world of international tax planning, immigration, residency, and second citizenship.
Contact Michael today for a personalized consultation and take the first step towards securing your financial future.
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Пікірлер: 64

@patienceisalpha 6 ай бұрын

Read a US tax treaty savings clause and you'll see how they can be a fugazzi lol. Read the UAE French tax treaty and you'll be surprised. The French tax authority has an article in there that essentially says that a UAE resident, if he could have been deemed French tax resident by following the French tax residency test can be deemed French tax resident regardless of the treaty. Meaning that if you reside 365 days a year in the UAE but have most of your financial ties in France then you can be deemed French tax resident. Whats even more mind blowing is the fact that this treaty has been ratified and has a portal to another Corpus of legislation (the French tax code)

@michelinevendette2284 6 ай бұрын

same thing in canada

@joe0248 6 ай бұрын

UAE-Canada tax treaty is also interesting... According to Article 4, you have to be UAE CITIZEN for it to applies, being UAE RESIDENT is not enough. Thus, it boils down to whether Canada decides you are or aren't Canadian tax resident.

@OlegScherbina 3 ай бұрын

same for Canada, in order to be non-resident for tax purposes for a Canadian resident you need to cut all the ties to Canada except a passport.

@yumchar7 4 ай бұрын

"Do your due diligence ahead of your move" is the key point for me. And use professional advisors, like Michael, to do so to get these questions answered: 1. How to stop being a tax resident in the country you're currently living in, it's not always straight forward 2. If you're setting yourself up to get paid as a company in an intermediate country (where there are zero taxes for companies if you don't operate / do business there), how do you register a company there and set up a business bank account there, 3. How do you pay the least tax in the country you're moving to - some visa types / citizenship types are better than others.

@JonasThente-ji5xx 6 ай бұрын

Thank you sir for the knowledge you share!

@OffshoreCitizen 6 ай бұрын

My pleasure!

@fjorddenierbear4832 6 ай бұрын

According to Norway I have tax residence in Norway for 3 years after I leave, even if I fulfill all the criteria for tax residence somewhere else. The Bulgaria-Norway agreement states: "1. The business profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein." I operate as a freelancer here, carrying out work online using my Bulgarian VAT number. I have no kind of permanent establishment back in Norway. Thus, it seems obvious that my Bulgaria-generated business income will only be taxable in Bulgaria. If Norway ends up taxing me, I guess I'll avoid work for a couple of years.

@TheFredrikBakkee 4 ай бұрын

I’m in a similar situation in Georgia. How any updates on your situation? I’m also Norwegian

@davidabushnell 2 ай бұрын

Absolutely spot on. I note that you want to be kind by not mentioning the onus of the typical Aricle 25’s stipulation of the Credit method of avoiding double taxation: the need to obtain an annual Certificate of Residency with its stated amount of Primary Country’s tax paid for submission to the Secondary Country, the need to therefore file the Primary Country’s taxes first, followed by that of the Secondary Country… sigh…

@boisehingis2399 6 ай бұрын

as a canadian living overseas, tax treaty are overrated, dont limit yourself to those countries having treaty with your homeland, it will takes planning regardless,

@mattkriese7170 6 ай бұрын

Another Canadian here (BC)! Dipping my toes into possibly working online from a South American country whilst earning income from Canada. Any tips for someone just getting started?

@goldensilver793 6 ай бұрын

Came across you by accident...good stuff...Thanks for the vid...

@OffshoreCitizen 6 ай бұрын

Welcome! Thanks for watching 🙏🏻

@PinkyLadybird 26 күн бұрын

I am currently living in Australia (citizen) and have worked and paid tax here for more than a decade. We are about to move to the Netherlands for 12 months where I will work in my online business. I am a German citizen and have no visa issue in the Netherlands. My family will be registered and my daughter will attend school there. During this time we will also receive income from renting out our apartment. For this next year I am very confused where I will be liable to pay tax. Will I just continue working on my (new) online business without worrying about the Netherlands, seeing that we will be back in Australia?

@jamestewari-hh7et Ай бұрын

Thanks

@p.c.h.6721 6 ай бұрын

Evil Hacienda, stay away from Spain (Shakira learned the hard way).

@justingriffin2546 6 ай бұрын

Thanks Michael,

@OffshoreCitizen 6 ай бұрын

A pleasure! What are your thoughts on this?

@justingriffin2546 6 ай бұрын

@@OffshoreCitizen I'm looking to open factories in Bahrain and Antigua, (waiting on a patent) my primary residence is in Genting highlands just outside KL...I'll definitely be consulting you...I'm sure you can help me with 'my cunning plan'....

@kevinstrong7520 Ай бұрын

Here is a better example if I understand it correctly. Greece has a flat 7% tax program for pensions. In addition to your pension, you make a total of 100K from USA (pension and earned income). Greece will tax 7% of that $100,000 and the remaining can be excluded from USA taxes because of the foreign earned income exclusion (up to $126,500). Therefore, you effectively keep $93,000 out of the $100,000 because of the 7% flat tax, tax treaty and MOST importantly you being a tax resident of Greece.

@Gorilladome4664 4 ай бұрын

Hey, thanx for the video...great content as usual! Quick question...contemplating this move near term... question involving becoming a tax resident of Thailand vai physically retiring and moving to Thailand. If I moved my Canadian stock portfolio overseas, say Singapore, to an investment bank, say DBS Vickers, access to NA markets, where a wealth manager took over the management of that account from myself. If the mind of the business remained in Singapore (through an individual trading account only), while Im residing in Thailand full time...then according to Thailand tax laws, those capitals gains would remain tax free if not remitted into Thailand...is that correct? So two points, the mind of the business must be in Singapore and the capital gains must remain offshore? RE double taxation treaties with Canada, Thailand....REV CAN would withhold is it %15 from my pension, is that right? and now with the new tax laws changing in Thailand for 2024, I would now have to pay a progressive tax on my Canadian pension coming into Thailand, but %15 REV CAN tax would be a tax credit? Thanx very much, 2 questions there I guess...

@alecventurelli6451 5 ай бұрын

As a Canadian individual without a company and ordering goods from the UK is it required to pay there VAT??

@artistpartyman8263 Ай бұрын

So, here is a scenario "If a person(s) Lives only in the USA and does an e-commerce business online by being an independent Artist & Music Producer, and streams music as a business, does that person have to pay 30% Treaty Tax to the global countries where the music is being streamed and collecting residual income?" I am asking this question regarding this Information Below: "Please note Person(s) may be subject to up to 30% withholding on payments for royalties if: an individual does not provide a U.S and Foreign Identification Number a person(s) is not a resident of a country with a tax treaty special rates or conditions are not claimed (if applicable)" Although this sounds like the opposite of what you just explained, What does this all mean for an independent music producer or e-commerce business practitioner?

@munirhussain6849 2 ай бұрын

Do you pay double tax because one country has capital control in place and only permits a small amount to be taken out of the country per annum.

@user-kt3hp3eu8m 3 ай бұрын

What if your place of residence, the place that you own, that you spend the most time consistently, is a USA flagged boat that spends all of its time, Ex-VAT, in the Mediterranean? Is there any issue with a mobile boat being your "residence" if you don't own a home elsewhere?

@munirhussain6849 2 ай бұрын

What if one of the countries where you paid tax on property income has capital control and you are not permitted to transfer funds to your resident country??

@dariussssssssssssful 4 ай бұрын

What if my residence country (call it country A) has 0% tax, but country where the capital income comes from (call it country B) has, say, 15% tax. Will I have to pay only to country A (0%), or to whichever is higher (country B, 15%)? What it the general rule?

@300rivers4 6 ай бұрын

Very informative. I had that question as it relates to a few decisions we're trying to make. Basically, you're taxed where your "stuff" is. Can one make a 3 or 4 month residence their "main" residence and still reside the balance in a different country. I think you explained it, but I just wanted to clarify. It sounds like it's not where you are, it's where your "base" is. Thanks, Michael. Always good to see a post of yours.

@kenlewis2253 6 ай бұрын

The looser your arrangement, such as what your proposed, the easier it is for tax authorities to challenged you. They only way to safely do what you want, I believe, is to split your time across multiple countries when you are outside of the country with your main residence.

@jakehart60 6 ай бұрын

My plan has been to just keep renting my $500 apartment in the USA while traveling Europe and Asia living off my passive income from my stocks. I would spend 2-4 weeks in each country nonstop therefore not staying long enough to be considered more than a tourist. I’ll only be paying taxes in the USA while living overseas full time only coming back to the states for a couple of weeks every year

@kenlewis2253 6 ай бұрын

Look into the Foreign Earned Income Exclusion if you plan to be outside for 330+ days.

@Iamsamuel69_2.0 2 ай бұрын

I found this channel by accident it’s really good, but I’m an American. I wanna move to Thailand and get a retirement visa but I will have some dividends and some investments in America and I own a house in America so will I owe Thailand any type of taxes?

@stevemitchell7839 6 ай бұрын

Is the 183 day rule fixed as to determining residency? If you own property in some parts of Canada, unless you live in it at least 183 days, you are liable for an empty homes tax of about 2% of value. So say if you live in the home for 183 days to avoid the empty homes tax and rent it out the rest of the year does that nevertheless make you a tax resident of Canada, even tho your center of life is still mostly in the US?

@kenlewis2253 6 ай бұрын

Surely Canada would go after you for taxes if they are aware of your presence for so long.

@ozziwar 6 ай бұрын

Another great video Michael! However, in a (very) few DTA's there are no tie-breaker rules. In that case, could you technically (in some cases) be a tax resident in two places?

@zackeryzackery9381 6 ай бұрын

I think you should distinguish between personal income tax/ capital gains vs. corporate income and capital gains. If I have management control of a company in Dubai and the company makes $10mill in profit, but I pay myself a salary or dividend of $100,000, I only owe personal income tax on the $100K regardless of where I reside.

@MacSaxe 6 ай бұрын

Depends where you live, most places have Controlled Foreign Company rules where if you live in say the UK and you manage that foreign company from the uk then it is considered to be a UK company and falls under UK taxation. Therefore you pay uk tax etc on your salary and if its dividends they’re after tax so by the time you get your dividend the company will have already paid taxes in the uk. There are exceptions but not many. Only way to avoid Uk tax is to live somewhere else such as Dubai if that’s where your company is. In that case no income tax but there is corporation tax at 9%

@pures1n 6 ай бұрын

What happens if you have multiple citizenships and some dont have double tax treaty with the country you reside, but some do?

@Energy950 4 ай бұрын

What happens to permanent travellers with no tax residency anywhere? Also, how do countries typically handle income to offshore LLCs rather than individuals?

@OffshoreCitizen 3 ай бұрын

Depends on all the circumstances involved. Probably best to reach out so we can discuss all the details

@lawtutoring 2 ай бұрын

Just ask AI like Microsoft copilot

@wagmi614 6 ай бұрын

can you create a video on crypto company setup for traders looking to create account on exchanges? UAE was good but now have the new tax

@OffshoreCitizen 6 ай бұрын

Yeah it's getting more limited I'll see if I can create some updated crypto content

@wagmi614 6 ай бұрын

@@OffshoreCitizen exactly markets are pumping need to setup the pipeline for exiting in the next 2 yrs

@geoff1971 6 ай бұрын

Hi Michael, thank you for the clarification. If an Australian moves there company to Dubai and they live in Dubai as a tax resident and there are no assets in Australia do I still pay income tax to Australia?

@OffshoreCitizen 6 ай бұрын

No, if you move your personal residency outside of Australia you will not pay taxes in Australia anymore. Same applies for the company, if you move your operations overseas and cut ties with Australia, while establishing a real business elsewhere your company will no longer be taxable in Australia. Of course, there are many details and nuances to consider here.

@geoff1971 6 ай бұрын

@@OffshoreCitizen thank you Michael, I was getting a little stressed, I asked my accountant about 6 months ago that question and about setting up an offshore bank account and he said" I don't know". I'm in my research stage and I need to liquidate some assets then goodbye Australia, hello financial security.

@donovanmic 6 ай бұрын

The tie breaker rule can help if you move to a treaty country and want to keep some ties to your home country. For example, if you moved from Canada, but kept your golf club membership in Canada that normally could drag you back into the Canadian tax system, I.e. the Canadian tax authorities would argue that you’re still a Canadian tax resident. However, if you move to Barbados (a treaty country), you’d probably be OK if you had a house in Barbados and no house or apartment in Canada.