Countries which do not tax traders' capital gains...

OxonianTrader · Nov 2, 2003

Quote from Tea:

Its not so much the country, its the citizenship of a country that also matters.

The US taxes you no matter where you live if you are a US citizen - of which I proudly am.
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I am proud to call myself an American and equally proud to call myself a Greek (I have dual citizenship). But I still would like to avoid that capital gains tax, at least when I first start out.

So if you live in the US for less than 183 days per year, you don't have to pay capital gains taxes?

Now you said that the US taxes your capital gains no matter what country you're trading from. Is the tax lower for those traders than it is for US bound traders?

Thanks

OxonianTrader · Nov 2, 2003

Quote from thetraderprofit:

I have spent considerable time and money, and have traveled the globe looking for the ideal tax situation.

I have spent many thousands on foreign attorneys and accountants, and I have consulted many knowledgeable international investors.

The biggest problem---and it is not insurmountable, is that the U.S> is one of the few countries that taxes both citizens and residents. International tax attorneys have told me the U.S> is the ONLY country that does this, but I have it on good authority that Libya, Eritrea, and , I believe the Phillipines tax both citizens and residents. Assuming Libya and Eritrea aren't on your list of destinations:

So, you're thinking, "I'll just change my citizenship from the US to , say, Holland," where you are taxed on your capital, not on gains.

Guess Again.

If you change your citizenship, and depart the U.S. with more than $500k in assets OR you have paid an average of more than $100k in taxes during the immediately preceeding 5 year period, the United States will continue to tax you AS IF you were a citizen for an additional ten years.
The only possibility of escaping this draconian treatment is to marry a foreign national and then seek citizenship. You can then make application for special "dispensation" from the IRS.

Now, if you want to go so far as to marry a foreign national and change your citizenship, there are some very good tax benefits.

My top choices are Holland and Costa Rica.
Holland assumes you earn 4% on your money and taxes you at the rate of 30%, so the tax rate is 1.2%. That means you pay 1.2% whether you win, lose, or draw. Other taxes, as well as living expenses are high.The climate is a little cold, but the people are hot!!! You can't just move there, though.
You have to start a business and show a profit of $8,000 Euros
to get in under the Dutch American Friendship Treaty (unless you marry a Dutch national). It's a wonderful country and I love visiting. Almost everyone speaks English, and, hey---how can you hate a country that televises two episodes of The Simpsons daily.
The Dutch love Americans, unlike other European countries. I noted that almost all the gang grafitti was in English. Plus, it's a very liberal country with lots of petty thievery and dogshit on the sidewalk. A typical decent home will be $500k US at current exchange rates. Of course, this varies by location. You have to register with the Foreign Police. So, they know where you are at all times.

Costa Rica won't tax you on capital gains. It's a stable democracy with no army. They won't tax you on income earned abroad (for example, dividends and interest). CR is a developing country , prices are not cheap, and taxes are high (13% VAT, and about 50% on a new car). You can gain residency by showing an income of $1,000 / month which must be converted into colones.

Unlike Holland, there are a lot of poor people in CR. A maid can be had for $200 / month.
The CIA has proposed opening its new School of the Americas (the name has been changed to fool the stupid) in Costa Rica, so
its not a place to hide out.

It's a lot easier to get internet in CR than Holland, or at least to get it quickly.

Costa Rica has a very stable temperature--in the mid to high 70's, but it's much hotter on the coasts. Be prepared for rainfalls in excess of 125 inches yearly. It's extremely humid.

Niether country's occupants seem to think air conditioning is necessary, although I disagree, if only for it's dehumidification properties.

I am continuing my worldwide quest and will post up as I visit countries.
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Well that was extremely helpful. Thanks. Do you know if the UK taxes residents as well as citizens? You know what the tax rate on salary is in the UK? If tax brackets are used, as in the US, do you know what the highest tax bracket is and the lowest? I am considering taking a job in the UK soon but am curious about how much of my salary will be take home pay. For example, if I get a salary of 35,000 pounds, how much of that can I expect to take home and how much of that can i expect to go to taxes? Note that I am a US citizen who will be cleared to stay in the UK by my college. THe clearance should last two years.

Thanks

sptrading · Nov 2, 2003

I believe the three contries I mentioned do not have any criterions to make the distinction between investment and trading. Individuals will not be taxed on capital gains.
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Wrong, at least in Belgium. It will depend on the number of trades. So, if you are a daytrader, you will be taxed at the regular income rate.

OxonianTrader · Nov 2, 2003

Quote from Kicking:

Didn't you mean it's a lot easier to get internet in Holland than CR?

I think a lot of you are being misled by focusing on the CGT only and also by European traders who don't even know their tax codes or do not disclose the extent of their trading to the tax authorities . There are other taxes that hit self employed persons in the EU, AND don't believe that the authorities won't try to establish that your trading is a profession in order to tax you at the income rate.

In Holland you'll have to pay SS taxes which are very high like in other EU countries and if trading is your only source of income, you will be considered a professional so kiss the low flat rate good bye. Same in Belgium. Luxembourg is worth a look but life is probably extremely boring there. Otherwise Switzerland if you meet the net worth requirements.

So believe me the US is not bad at all. And it is still the best place to live in the world IMO (for the standards of living at least). If you want to live in Europe (but why would you?) consider the UK, no SS taxes, similar to the US (if you are in London) and great trading hours onall the world markets. First 7000 pounds of CG are exempt, top income tax rate is "only" 40%.
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Now what about salaried positions in the UK? How are they taxed? If someone signs a contract for 35,000 pounds, how much of that will be take home pay? Please note that the someone (me) would be a temporary resident of the UK while he worked and a US citizen.

Thanks

ElectricSavant · Nov 2, 2003

This is what you do.......

Set up a charitible trust with you being the controlling party....forget the legal term.....trustee, conservator or executor....not beneficiary though!

Pay yourself a salary (a high one) when you die the millions go to the charitie(s) and you avoid the kids battling over your weath while your alive and dead.

Since your working for the trust and it is a charitable trust perhaps your salary is a reimbursement and not taxed too...

Michael B.

Could anybody that knows more about this comment.....please contribute....sorry to get off topic but the US is the best tax wise imho.

Michael B.

Banjo · Nov 2, 2003

http://www.escapeartist.com/taxhavens/taxhavens.htm

BlueHorseshoe · Nov 2, 2003

Quote from thetraderprofit:

I am continuing my worldwide quest and will post up as I visit countries.
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Stop by Singapore, if you are open to living in Asia. You can icorporate for about US$1,000 all-in, and the annual accounting/reporting is about half that. You and your spouse can draw a salary from the entity, after which tax rates are about 10%. Note this also helps considerably if you are also filling US taxes on a WW basis.

I'm sure penny-wise there are better set-ups but for expats in Asia Singapore is quite good. Also city is very clean and crime-free.

OxonianTrader · Nov 2, 2003

Quote from BlueHorseshoe:

Stop by Singapore, if you are open to living in Asia. You can icorporate for about US$1,000 all-in, and the annual accounting/reporting is about half that. You and your spouse can draw a salary from the entity, after which tax rates are about 10%. Note this also helps considerably if you are also filling US taxes on a WW basis.

I'm sure penny-wise there are better set-ups but for expats in Asia Singapore is quite good. Also city is very clean and crime-free.
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...don't you mean freedom free?

reid5525 · Nov 2, 2003

Helpful info at CIA World Factbook

BlueHorseshoe · Nov 2, 2003

Quote from OxonianTrader:

...don't you mean freedom free?
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Don't get me started ... at least here the drug dealers are executed, the bad guys don't carry guns, and the ho's stay in the brothels. I'd rather saw off a limb than return to the States anytime soon.

Amerca's concept of 'freedom' has gotten so warped over the decades, it is quite sad. Don't mean to open a can of worms ... I'm not interested in a debate.