here's one for you Stuart ... European retirement tax havens !!!
(snip)"OK, but how about a really, truly low-tax Euro-haven: Andorra. Haven't heard of it? It's a 468-square-mile niblet of a country carved into a mountainous section of the Spanish-French border. It's a bummer place to work if you're not a shepherd. But it's a great place to retire to. There is no income tax here. The retirees who've poured in have become Andorra's main industry. Chiltern notes that there are some "modest annual registration fees, municipal rates and property transaction taxes, [but] there are no special regimes for 'offshore' entities or trusts."(snip)
Re: here's one for you Stuart ... European retirement tax havens !!!
A really good friend of mine went for a few days at Christmas time. He's an aussie and was living - at the time - in Barcelona. The photos look fantastic. His discription was, and I quote, 'What heaven must be like'
The only downside is the 6 months pa residence - similar to Monaco. Of course, normal people can retire in Andorra, only the super rich go to Monaco.
I'm dreaming...
Re: here's one for you Stuart ... European retirement tax havens !!!
^^^ I hear you re dreaming ! However, as a US citizen, I'm also contemplating the ramifications of America's income tax on the worldwide income of citizens regardless of where they are permanently residing. In order to take advantage of Andorra or any other very low tax retirement location, I still have to obtain a passport from a different country and renounce my US citizenship in order to avoid the US tax.
Re: here's one for you Stuart ... European retirement tax havens !!!
I know. What is a girl to do? How are your Catalan lessons coming along? I'm told that neither French nor Spanish is sufficient to live in Andorra.
And with the way the dollar has been falling, that $80,000 exemption soon won't mean a thing! It'll be double taxation all the way ... not good for US expatriates. I guess, that there will HAVE to be lots who renounce citizenship just so that they can afford to live. Otherwise the tributes paid to a far away government will make life unaffordable for many.
Either that, or never return and never travel so there is no need for a passport!!! Hardly a useful solution.
Re: here's one for you Stuart ... European retirement tax havens !!!
Goddamit, I can't wait for Ukraine to get into the EU so I can get a EU passport already!!!
Catalan isn't too difficult to learn if you know spanish. Its a lovely-sounding language. I danced for one Andorran guy when I stripped in Amsterdam. He was very cheap, lol!
Re: here's one for you Stuart ... European retirement tax havens !!!
C'mon Katrine, Ukraine isn't going to get into the EU for decades.
Next on the list that will take forever are Kosovo and Turkey. But then there is always Albania and Moldova to come too. And even if you do get and EU passport, I'm sorry to say that so many countries view them differently that it isn't really like having an EU passport.
One of my best friends is Latvian. She lived in Philadelphia and Washington for 7 years, going to Georgetown. But despite being a genius compared to me - her passport makes life very difficult for her. Its a real shame.
If you really want an EU passport, you will probably need to marry one - sorry to be so harsh.
By the way - as an aside - my best friend holidayed in Lviv not so long ago. The photos make the place look really special - though poor - but certainly an experience. He tells me it was an amazing experience.
Re: here's one for you Stuart ... European retirement tax havens !!!
Quote:
Originally Posted by
StuartL
C'mon Katrine, Ukraine isn't going to get into the EU for decades.
Next on the list that will take forever are Kosovo and Turkey. But then there is always Albania and Moldova to come too. And even if you do get and EU passport, I'm sorry to say that so many countries view them differently that it isn't really like having an EU passport.
Perhaps. Just commenting. I have US citizenship, but now that US-Ukrainian diplomatic relations have improved, I can get Ukrainian citizenship too. Down the line I might qualify for Russian citizenship too, although the Russians are far more bullheaded than the Ukes, I don't see them getting into the EU, like...ever, lol!
I'm not too worried, US passport is adequate, although less happily accepted since Dubya came into office.
Re: here's one for you Stuart ... European retirement tax havens !!!
The best tax deal, provided you want a USA passport and have enough income is the US Virgin Islands. Like anything, there are restrictions and you have to be a business person, but it is a great deal. Ten percent of your Federal Tax.
Re: here's one for you Stuart ... European retirement tax havens !!!
^^^ the USVI recently changed their laws in this regard. Unfortunately, too many rich Americans were claiming USVI legal residence thus exemption from mainland US federal taxes by renting an apartment in the VI and visiting one day per year ! In order to get the USVI income tax break now, you must physically reside in the USVI at least an average of 183 days per year for three years running.
However, there appear to still be a few 'angles' available ... what do you think of
... which basically allows you to form a Domenica offshore corporation, to transfer your assets / stocks / bonds into that corporation via the Domenica bank, and to then allow your Domenica corporation to trade your stocks and bonds, collect dividends and interest etc. totally free from both US and Domenica tax. As an American citizen you can then pay yourself up to $80,000 in 'salary' from your Domenica offshore corporation's 'profits', with that $80k being exempt from US personal income taxes as it is considered to be foreign income.
Re: here's one for you Stuart ... European retirement tax havens !!!
It is not USVI law. Congress passed the law in 1986, and it is still in effect. You are correct that you must stay in the USVI for that amount of time. However, you are missing that you must employ ten local people.
Re: here's one for you Stuart ... European retirement tax havens !!!
Fuckit, I'll happily retire to either of those places. The Carribbean is god's gift. :)
Re: here's one for you Stuart ... European retirement tax havens !!!
Quote:
Congress passed the law in 1986, and it is still in effect. You are correct that you must stay in the USVI for that amount of time. However, you are missing that you must employ ten local people.
believe me I've been around the horn on this one. Actually the USVI changed the law in 2004 by signing on to an information sharing agreement with the IRS ...
... which resulted in a reinterpretation of the VI residency requirement as well as a reinterpretation as to what sorts of income can and cannot be considered as VI income under the VI EDP tax credit. As of last march's court ruling, only income earned in VI by business enterprises actually operating in VI still qualify for the EDP tax credit. This basically now makes the VI useless from the standpoint of sheltering mainland business income of any kind and mainland investment income too for that matter.
Back to the major topic of this thread, which revolved around retirement finances ...
If you are a US citizen and wish to stay a US citizen to retain your passport, then you are subject to paying US federal tax on income from virtually ANY source. At the moment there is a tax exemption in place for the first $80k per year of income derived from 'foreign' sources ... but there is already talk in Washington of reducing / eliminating that tax exemption. At the same time, the total effective US tax rate on that $80k of income is on the order of 33%. So for an American citizen who wishes to retire, and who has managed to build up say a million dollar's worth of nest egg over the years, paying vs avoiding the US federal tax makes the difference between having $80k per year versus $50k per year in retirement income from that nest egg to live on.
Actually, it's worse than that, because that same American citizen would be eligible to receive say $20k per year from Social Security at age 62 if they had no 'reportable' income. Given current SSI law plus highly probable future SSI means testing, having $80k per year in 'reportable' income would very well disqualify that American citizen from receiving SSI checks. Thus from the standpoint of spendable retirement income, setting yourself up in a retirement tax haven may actually make the difference between retiring with a $50k annual income vs a $100k annual income based on the SAME sized nest egg !
One potential way to legally do this, and still remain a US citizen, is to form an offshore corporation to act as a 'holding company' for your nest egg. Theoretically, the capital gains + interest and dividends earned on those nest egg investments by the offshore corporation are 100% exempt from US taxes ... and if registered in the 'right' country are exempt from that country's taxes as well. However, when the offshore corporation pays out part of those tax free earnings as a 'salary' or 'dividend' to the shareholder, that salary or dividend is reportable and taxable by the IRS as long as that person remains a US citizen. Even so, there is an element of control available to limit the size of these salary or dividend payments in order to remain eligible for SSI checks and/or remain eligible for some tax exemption on 'foreign income' !
opinions ?
.
Re: here's one for you Stuart ... European retirement tax havens !!!
I thought you only had to be outside the US for 183 days, and where you spent it was irrelevant. USVI would get old real fast IMHO.
Re: here's one for you Stuart ... European retirement tax havens !!!
The first article, an IRS news release, has nothing to do with this tax issue. It is mearly an agreement to share information, one that is common among States with the IRS. The second article is causing fund managers on the Street and others to quake in their boots. Basically, the USVI tax issue was promoted among bigger accounting firms. The rules are very clear, although many promoted them as confusing. Basically the car dealer choose to interpert them as his not needing to actually live in the USVI. He did own a house there. However, he leased it to the USA Coast Guard. This clearly violated the rules. There has been abuse and more are going to be indicted. But, this is still law and still legal at this time. I too have been around the horn on this one. I have ordered a research paper on this that I expect to have today that will explain in detail the law on this matter.
Re: here's one for you Stuart ... European retirement tax havens !!!
Quote:
I thought you only had to be outside the US for 183 days, and where you spent it was irrelevant. USVI would get old real fast IMHO.
well, if you want to claim the USVI EDP tax credit in order to vastly reduce your US tax liabilities, you now MUST reside in the VI more than half of the year for three years running. Arguably, this was NOT a requirement prior to the USVI / IRS agreement being executed in 2004. Also, since 2004, without the USVI EDP tax credit the VI offers no significant advantage re personal tax rates over living in Texas or Florida or other states that do not have a state income tax. Prior to 2004, persons 'living' in the USVI (for even one day a year) were allowed to file federal income taxes with the USVI rather than with the IRS.
Quote:
But, this is still law and still legal at this time. I too have been around the horn on this one. I have ordered a research paper on this that I expect to have today that will explain in detail the law on this matter.
I'd love to hear those details. So would my accountant ! Thanks.