Ways to ensure your personal income is not taxed - Using Local Tax Laws
Whether you have a company or companies dividend income is always painful! There is a way to avoid such income and usually this can be achieved via your own tax residencty status. It is a global common tax practise to tax the individual tax payers are the country where they reside most of the time. Most international income tax offices use the 183 days rule (half a year) where if you live in a country for more than 183 days then you are considered to be tax resident of that country and you are taxed based on that countries tax laws.
This allows some space for manuvre and tax planing opportunities as explained below.
Choose to live in a Tax Free Juristiction
As an individual you can choose to lieve in a tax free juristiction like Dubai, BVI, Seychelles, Middle East and as a result you will be subject to, if any, tax laws of those jurisictions (countries). Since those countries / juristictions are tax free then you are not to pay any taxes on your worldwide dividend income.
Is this why Dubai is amongst the winners and preffered by so many high net worth individuals?
Businesspeople by relocating there can enjoy undisputted tax free inocme from their worldwide investements.
But what exactly does this mean?
This mean that although dividend incmoe or passive income may be taxed at source (taxed in the country the Company belongs to) when that income is send to the shateholder who lives in Dubai or any other tax jurisiction this oncome will not be taxed again simply because the tax residency of this shareholder is in a tax free zone.
If the dividend or other passive income is generated in tax jurisictions where it does not get deducted at source and then paid to shareholders who live in tax free zones then again this income is 100% tax free.
Choose a Country that has Tax Free Laws for Persons Relocating
Example Cyprus
Cyprus has introduced the non dom tax law where a person is effectivly a tax resident in Cyprus under this law but is except from Special Defence Tax. As dividends received by Cyprus shareholders are taxed only subject to Special Defence Tax, an international person relocating to Cyprus will be enjoying world wide tax free dividends.
Enjoying Tax Free Dividends is not only an Offshore or Middle East Benefit
Cyprus example follows other european countries who have their on sets of rules and which can render the dividend income received on a global basis tax free. Note: if this income is taxed at source that tax can not be avoided.
Note: Always consult with local tax experts and consultants like ourseleves as tax laws frequently change and commonly have timeframes for their appropriate application.
Ways to ensure your income is not taxed - Using Local Tax Laws
Whether you have a company or a company's dividend income is always painful! There is a way to avoid such income and usually, this can be achieved via your tax residency status. It is a global common tax practice to tax the individual taxpayers are the country where they reside most of the time. Most international income tax offices use the 183 days rule (half a year) where if you live in a country for more than 183 days then you are considered to be a tax resident in that country and you are taxed based on that country's tax laws.
This allows some space for maneuvering and tax planning opportunities as explained below.
Choose to live in a Tax-Free Jurisdiction
As an individual you can choose to live in a tax-free jurisdiction like Dubai, BVI, Seychelles, Middle East, and as a result you will be subject to if any, tax laws of those jurisdictions (countries). Since those countries/jurisdictions are tax-free then you are not to pay any taxes on your worldwide dividend income.
Is this why Dubai is amongst the winners and preferred by so many high-net-worth individuals?
Business people by relocating there can enjoy dividends-free income from their worldwide investments.
But what exactly does this mean?
This means that although dividend income or passive income may be taxed at source (taxed in the country the Company belongs to) when that income is sentenced to the shareholder who lives in Dubai or any other tax jurisdiction this income will not be taxed again simply because the tax residency of this shareholder is in a tax-free zone.
If the dividend or other passive income is generated in tax jurisdictions where it does not get deducted at source and then paid to shareholders who live in tax-free zones then again this income is 100% tax-free.
Choose a Country that has Tax Free Laws for Persons Relocating
Example Cyprus
Cyprus has introduced the non-dom tax law where a person is effectively a tax resident in Cyprus under this law but is except worldwideSpecialworldwide special Defence Tax. As dividends received by Cyprus shareholders are taxed only subject to Special Defence Tax, an international person relocating to Cyprus will be enjoying worldwide tax-free dividends.
Enjoying Tax-Free Dividends is not only an Offshore or Middle East Benefit
Cyprus's example follows other European countries that have their own sets of rules and which can render the dividend income received on a global basis tax-free. Note: if this income is taxed at the source that tax can not be avoided.
Note: Always consult with local tax experts and consultants like ourselves as tax laws frequently change and commonly have timeframes for their appropriate application.