Don't end up like Shakira! What happens if you are not a tax resident in any country?
What happens if you are not a tax resident in any country?
If you are not a resident of any country, then the country generally will not have the right to tax you on a worldwide basis.
In general terms, this means that especially your foreign income cannot be taxed in that jurisdiction.
In fact, the avoidance of establishing residence is a widespread tax planning technique.
But to avoid getting into trouble it is necessary to have a thorough knowledge of the tax legislation of the various relevant countries.
For example, an individual who travels habitually must know, on a timely basis, the specific tax residency rules of the countries in which he spends time, to avoid becoming a resident in one of those jurisdictions.
The famous singer Shakira seems to have made the mistake of not considering these rules carefully, although we do not know if she operated independently, or if she was badly advised by some consultant.
On the other hand, the market is full of consultants, who are not even lawyers, but who equally dispense advice that only an international tax lawyer is really able to give, aware that in case of error the problems will be for the taxpayer and not for the consultants.
Today the famous singer faces 8 years in prison in Spain, and a fine of 24 million euros.
It must be said that, as far as individuals are concerned, most countries look at the number of days spent in hat country, and where the center of vital interests is located, where the home is located, or use other qualitative criteria.
Simplifying, this is a good way to think about the issue, but in practice it is not always that simple.
Some countries, like the United States and very few others, tax income based on citizenship.
Instead, a number of other countries have for example special rules against avoidance, which in some cases consider you to be a resident for a number of years even after your departure.
If you need specific advice, also to find the best place to relocate in consideration of your specific needs, you can contact us and we will put you in touch with an international tax lawyer highly specialized in assisting clients in your position.
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