Double Your Pay by Moving to a Tax Friendly Country
Legal tax avoidance is getting easier for a growing number of people. Anyone who’s able to work remotely can live wherever they want. More people are choosing to live in countries where there are either low or minimal taxes. They can give themselves an effective pay rise of close to 100% by doing this.
For citizens of most countries of the world they can just leave. There will be no taxes owed for the next tax year. The USA is the exception to this rule as they have citizenship-based taxation. But even Americans can legally avoid most taxes. The Foreign Income Tax Exemption exempts $112,00 per person from federal taxes. That means $224,000 is tax free for a couple. Other legal avoidance strategies can be used to ensure that no tax is payable at all.
Tens of thousands of residents of high tax countries like the UK, Australia and Canada are selling up and leaving their countries for good. They’re getting increasingly disillusioned by the high cost of living and more authoritarian governments. They are finding that they can have a much better quality of life overseas.
Territorial Tax Countries for Legal Tax Avoidance
Moving to a tax haven or a territorial tax country is the best plan for legal tax avoidance. There are dozens of countries to choose from. No matter what lifestyle you want. No matter what time zone you want to live in. There is a new country ready to welcome you.
There are the old favourites like the United Arab Emirates and Monaco. Move to either of those countries and you’ll never have to complete another tax return. But people are seeking out new havens. There are mounting offers from countries who want t attract these wealthy new residents. The kind of people who’ll spend money in the local economy without being a burden by using government services. Thailand has its Thai Elite Visa. This was designed to attract high net worth residents. Thailand offers Thai Elite Visa holders a series of lifestyle perks such as VIP fast track service at the airport to come and live in the country tax free.
In Europe Portugal has the Non-Habitual Resident Scheme which allows certain types of income such as dividends and rental income to be free of tax. As Portugal’s on the same time zone as the UK it’s attracting many British expats. American expats are attracted to Portugal as the most westerly country in Europe and its similarity to the California coast.
Countries want New High Net Worth Residents
In Central America Costa Rica and Panama are firm favourites with foreign residents. Both have territorial tax systems. Any income earned outside these countries is tax free. It’s the perfect legal tax avoidance plan.
In South America, sleepy Uruguay is tax free for foreign residents. They’re keen to attract families. If you bring your family to Uruguay and become part of the local community, faster citizenship is available.
Those are just a few examples of the dozens of countries that are keen to attract new residents. Every day we advise clients on the best countries to go to suit their circumstances.
Taxes Will Rise in Western Countries
Government debt is higher than ever. Inflation is raging in many countries. People are demanding more government handouts. This will inevitably lead to higher taxes. Worse still it will lead to tougher enforcement of tax rules. Legal tax avoidance will become more important than ever. Money grabbing tax collectors such as the IRS and HMRC will become even more aggressive. The US Senate recently passed the Inflation Reduction act. The act calls for an additional 87,000 IRS agents. Other countries will pursue similar policies. Now is the time to start planning your departure if you’re in a position to do it. Things in western countries are not getting better any time soon.
Why Most People Will Never Leave
While the numbers of people moving abroad is growing, many people can’t bring themselves to leave the familiarity of their home country. Even when it’s obvious it’s headed in the wrong direction and 50% of their income is being extorted in income tax every year. The biggest things that people worry about are leaving family behind, healthcare, education and language.
None of this ought to be a worry. Healthcare in most of the world is affordable and much higher quality than government run healthcare systems. There are top English speaking schools in almost every country in the world. It’s a challenge to learn a new language. It’ll improve your life immeasurably if you make the effort to do it. However, it’s not essential. I know people who’ve spent decades living abroad without learning the local lingo. You might even find you spend more quality time with your extended family as they come to visit in your new exotic location.
Legal tax avoidance itself is a major reason to move. But it’ll increase the quality of your life and expand your world in ways that you haven’t considered. If you’re able to make the move, I’d urge you to give it a try.
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