There is also the case of whether the tax authority of the home country considers someone to be a bona fide resident (for fiscal purposes) of another country. If one has resided in the new country for fewer than 183 days, then there is some likelihood that the claim of being tax resident will be rejected by the home country's tax authority--and hence any protection from double taxation established through treaty goes out the window, until proof is obtained that you are legitimately tax resident in that second country. That could take another year. I know because I have experienced this.
Great point. It's usually quite an extensive process to lose your tax residency. It often involves breaking all ties and having a permanent place abroad where you actually live and pay taxes (just being a digital nomad won't work here).
Important to read and understand the official government definitions of residency and fiscal residency, and to clearly understand the differences between those things and the concept of being domiciled somewhere. In my experience, workers on the ground in the tax authorities do not have mastery of the details in all the tax treaties. Moreover, some tax authorities will have a specific form that references tax exemptions due to treaties; if a naïve individual, filing a tax declaration on their own, omits such a form, then the exemption will probably not be made. As you say, it's complicated, and having informed professional advice on these matters can make a world of difference.
I never considered the fact that low tax countries have a high cost of living, that's an excellent point. Also, what is FIREing? (I was reading your Reddit thread you screenshotted).
Financial Independence Retire Early - it's a pretty popular movement where people save up in younger years, and then retire to live off of investments and savings.
There is also the case of whether the tax authority of the home country considers someone to be a bona fide resident (for fiscal purposes) of another country. If one has resided in the new country for fewer than 183 days, then there is some likelihood that the claim of being tax resident will be rejected by the home country's tax authority--and hence any protection from double taxation established through treaty goes out the window, until proof is obtained that you are legitimately tax resident in that second country. That could take another year. I know because I have experienced this.
Great point. It's usually quite an extensive process to lose your tax residency. It often involves breaking all ties and having a permanent place abroad where you actually live and pay taxes (just being a digital nomad won't work here).
Important to read and understand the official government definitions of residency and fiscal residency, and to clearly understand the differences between those things and the concept of being domiciled somewhere. In my experience, workers on the ground in the tax authorities do not have mastery of the details in all the tax treaties. Moreover, some tax authorities will have a specific form that references tax exemptions due to treaties; if a naïve individual, filing a tax declaration on their own, omits such a form, then the exemption will probably not be made. As you say, it's complicated, and having informed professional advice on these matters can make a world of difference.
I never considered the fact that low tax countries have a high cost of living, that's an excellent point. Also, what is FIREing? (I was reading your Reddit thread you screenshotted).
Financial Independence Retire Early - it's a pretty popular movement where people save up in younger years, and then retire to live off of investments and savings.
I actually think it's not that great of an idea https://ffstrauf.substack.com/p/money-can-buy-time-how-much-time