Trading for a living & taxes in EU

Discussion in 'Taxes and Accounting' started by w4rri0r, Feb 18, 2018.

  1. TDMA

    TDMA

    That's a highly uneducated response, Goldman don't know anything about individual cross border tax structures, you need KPMG or one of the boutique advisors. The only thing you came close with is their fees, $10k plus, and even then you had better do your dilligence because often they are wrong and you are the liable party.
     
    #71     Feb 27, 2018
  2. schweiz

    schweiz

    There is a lot of confusion apparently:
    • The 183 days that Malta uses are not accepted by the country you are living in. It has only to do with your tax situation regarding Malta tax offices.
    • The country you are living in will not use these same rules.
    • the 183 days rules are used in article 15 of the OECD Model Convention and are only used regarding the "economic employer priciple". So this has NOTHING to do with the 183 days Malta speaks about as teher is no "economic employer" in your case.

    Confusion about the 183 days rule: it is about working or an employer.

    183 days rule & the economic employer principle:

    Based on article 15 of the OECD Model Convention, the remuneration of a seconded employee is in principle taxed in the country where the work is actually exercised. However, the right of taxation remains with the country of residence if the employee:


    • is not present in the working state more than 183 days; and
    • the salary is not paid by a subsidiary of the employer in the working country; and
    • the salary is paid by an employer, or on behalf of an employer, who is not resident in the working country.

    Even if the above conditions are met, the employee’s remuneration may still be taxed in the working country if the company in the working country qualifies as the “economic employer”. Under the economic approach, important criteria for assuming an economic employment are:


    • the employee is integrated into the business of the host entity;
    • the employee is under the control of that entity;
    • the activities of the employee form part of the business of the host entity;
    • the risks of the activities are with this employer.


    Self employed or not working, and the 183 days rule:

    If that country (MALTA in this case) has concluded a double tax treaty with the country you are domiciled in, the problem will usually be dealt with by this treaty (Article 4 of the OECD Model Convention), which successively includes the following treaty criteria:

    - the taxpayer is regarded as a resident of the country where he has a permanent home, possibly being the country where he has the closest personal or economic ties (= center of his life interests);
    - if the country in which the center of vital interests is situated cannot be determined or if it has no permanent home in any State, the taxpayer is regarded as a resident of the country where he usually resides;
    - if the taxpayer habitually resides in two States or does not habitually reside in any State, he shall be regarded as a resident of the country of his nationality;
    - if that person is a national of both States or of none of these two States, the competent authorities of the Contracting States shall settle the matter by mutual agreement.

    If that country has not concluded a double tax treaty with the country you are domiciled in, the taxpayer is regarded as a resident of the two countries. This means that he runs the risk of being taxed twice on all or part of his income. In this case, the country you are domiciled in will take into account a proven double valuation by, in this case, reducing the personal income tax that is proportionally related to the foreign income.

    In short: you will pay taxes, no matter where you go. And to use Malta you will have to be there physically and being able to proof that for every day you claim to have been there.

    Proof like:
    • boarding passes (NOT bought tickets as they don't proof you went there!)
    • paid rent
    • tickets from shops, restaurants, bars and other expenses
    • healthcare insurance
    • detail of all trading transactions you did when you where in Malta
    • etc, etc
    I am not a professional advisor so go to one and don't just search internet as you might read articles from KMPG, Deloitte, PWC... in the wrong context.
     
    #72     Feb 27, 2018
  3. schweiz

    schweiz

    I have a fiscal ruling, organized by one of the big four. Total cost was 5,000 euro and there was no risk at all as it is a fiscal ruling. The aim of a fiscal ruling is to give 100% certainty. So there is no liability risk.
     
    #73     Feb 27, 2018
  4. Hello Schweiz,
    thank you for all what you wrote and it is all true for people who are resident in another country. I also very much agree that a lot whats written in the internet is either not correct, not updated or completely out of context.

    Regarding Malta:
    What I was talking about is to become a resident in Malta and being no resident in another country nor being physically 183days in another country.

    Its about being a 'self-employed' daytrader who is location independent while being an officially resident under the TRP program in Malta.


    Your quotes:
    - the taxpayer is regarded as a resident of the country where he has a permanent home, possibly being the country where he has the closest personal or economic ties (= center of his life interests);
    = It is Malta as you need to rent an apartment there for 9600 EUR/yr

    - if the country in which the center of vital interests is situated cannot be determined or if it has no permanent home in any State, the taxpayer is regarded as a resident of the country where he usually resides;
    = Malta as you are not a resident of any other country anymore


    Re DoubleTaxTreaties (DTT):
    DoubleTax Treaties are not relevant in this case when you are only resident in Malta AND not being present 183days in ANY other country of the world because then the rules you mentioned would be applied ( except of course if you are US citizen because as such you'd be taxed based from the IRS on your citizenship no matter where you live above 100k yr )


    TRP program and physical presence:
    Also, under the TRP program you would not need to prove you are there 183 days as there is no minimum requirment.

    You would only need to be in Malta for 183 days if you would need a tax certificate related to a DoubleTaxTreaty (meaning for example you live in Malta but receive income except trading from another country like rents or so)

    Taxes:
    Also, under the TRP scheme you pay taxes in Malta but only the 15k EUR per year if you do not remit the income to Malta


    Conclusion:
    This setup, to move residence from your country to Malta under the TRP program only makes sense when your potential tax savings from daytrading is higher than 30k EUR/yr ( 15k min tax + 9600 EUR rental + flights lalala )
     
    Last edited: Feb 27, 2018
    #74     Feb 27, 2018
  5. schweiz

    schweiz

    I misread this sentence. I read "not more then 183 days in Malta". My bad.
     
    #75     Feb 27, 2018
  6. schweiz

    schweiz

    Can you live in Malta and pay all your expenses with a bankaccount outside of Malta? Because in that case your maximal taxation would be 15k.
    So I would pay my rent, insurance, food, restaurant... with a Swiss bankaccount.
     
    #76     Feb 27, 2018
  7. Hello Schweiz,
    you are very knowledgeable and I like the way to think about everything.

    Yes, you could pay everything from for example your Swiss BankAccount but everything you 'bring into Malta' you'd need to pay 15% taxes by declaring it.
    But as you would need to pay 15k EUR as a minimum tax per year anyways, everything below 100k as turnover/year (15k EUR being 15% of 100k EUR) would imho be more way than enough.

    The thing you would need to consider though if you really want to be physically in Malta that if you would trade actively by being on the Island on these days, you'd need to declare that as well as that income then would be generated while physically being there.

    If you for example are 170 days in Thailand, 80 days Switzerland, 100 days France and 15 days somewhere else you would have no problem.
    You would just need to be aware that while being physically present on Malta this would then be considered as income generated in Malta with tax implications.

    As long as all that is below 15k EUR it wouldnt be an issue but everything above you'd need to tax then with the 15%.

    The TRP setup is great for location independent 'nomads' or people who are not physically more than 183 days in any other country.
    Of course the 183 days rules has exceptions if for example you would have family (wife/kids) in another country; then this would be an issue.
    Also countries like Switzerland for example, you would need to be taxable if you'd stay more than 90 days in the country.
     
    #77     Feb 27, 2018
  8. w4rri0r

    w4rri0r

    that's not true.... if you are not an italian resident you pay capital gains where you have fiscal residency
    if you have italian residency, you can choose if be taxed automatically at EVERY trade each time or do the tax stuffs on your own once a year and only then you will pay your 26%
     
    #78     Feb 28, 2018
  9. mh512

    mh512

    Have you considered the "Beckham Law" in Spain ?

    24% tax on 1st €600k for 6 years via a Company( can be non Spanish Company). Pay yourself a good wage and invest the rest abroad.
    Structure your saving into a private annuity and move to Portugal after 6 year using the Portuguese NHR scheme !
     
    #79     Apr 4, 2018
    tomorton likes this.
  10. Vindago

    Vindago

    yes you a right, though I fail to see how and why anyone would like to trade through an italian broker if not because he reside in Italy...

    I reside in Italy and I use a US based broker and wouldn't dream about using an italian broker.
     
    #80     Apr 4, 2018