This entry broaches the question of offshore taxation and residence.
Citizenship based Taxation
The following countries tax the income of all their citizens irrespective of where they live:
- US
- Eritrea
- Japan
Japan requirement is not citizenship-based but it recently amended its law to tax anyone with permanent right of abode on his global income, irrespective of whether one actually lives in Japan. This criteria is even broader than citizenship.
With such law, the countries taxation abilities are unlimited, and limiting this power often requires mitigation with a Citizenship By Investment (CBI) program.
Residency based Taxation
All residency based countries tax their "tax resident" on their worldwide income. Tax residency starts with the general rule that spending more than 183 days in a county makes you a tax resident.
However, tax authorities are known to apply other criteria if it can increase tax such as
- where your dependents and children live,
- where you work and have your activity
- where is the center of your economic interest (e.g., substantial assets holding in a country)
Territorial based Taxation
The following countries follow territorial tax, and only tax income generated domestically. I show their GDP per capita.
- Macau 87k
- Singapore 64k
- Hong Kong 46k
- Malaysia 11k
- Gibraltar 92k
- San Marino 48k (GDP per capita halved since 2008)
- Georgia 5k
- Panama 15k
- Costa Rica 12k
- Nicaragua 2k
- Paraguay 6k
source: nomad capitalist and wikipedia retrieved June 2020.
No income tax countries
According to nomad capitalist, these countries have no tax on local income, whether the tax system is territorial or not is a moot point.
- Monaco: multi-million PR, 185k GDP per capita
- Cayman: 600k investment for PR, 81k GDP per capita
- Bahamas 250k investment for PR, 32k GDP per capita
- St Kitts and Nevis: 150k CBI, 19k GDP per capita
- UAE: no PR but renewable residence, 43k GDP per capita
- Bahrain 135k investment for PR
- Qatar: no PR
- Kuwait no PR
- Oman: no PR
- Brunei not foreigner friendly
- Vanuatu: CBI program
- Maldives: no PR
- Nauru: phosphate mining and sinking island
- Somalia: dangerous
- Western Sahara: unstable
A more comprehensive review of territories tax level is available here
