Tax regimes and financial factors, as well as lifestyle, are key considerations for individuals that are looking to emigrate to other countries, according to BDO’s Global Opportunities report
Most countries charge VAT or other indirect taxes for example, on property transfers as well as direct tax on personal things such as income and profits.
Some countries will also tax capital gifted and inheritance and charge an annual tax on net wealth. Australia and other countries will even tax individuals when they break their tax residence and leave the country.
BDO, in partnership with Knight Frank, provides a summary of tax regimes focusing on the 23 most popular countries that people choose to move to.
It is important when moving country to have a clear understanding on the tax regime in the country of choice, to live in the most tax efficient way, as most countries tax individuals based on whether they are a resident.
Richard Montague, BDO’s head of international private wealth and chair of the global private client strategy group, said: ‘Individual objectives mainly focus on ensuring long-term asset preservation whilst complying with their global tax obligations. An understanding of the tax regime in the country of choice continues to be key.
‘Tax efficiency does not necessarily mean reducing the annual tax bill but rather ensuring that it is not increased unexpectedly. There are many pitfalls for the unwary.’
Australia and New Zealand have no taxes on net wealth, inheritance or gifts and New Zealand does not charge for stamp duty.
However, the US is a high tax country which comes with lots of regulation and compliance. They have a federal tax which applies to all residents and citizens.
The United Arab Emirates has no personal income or capital taxes and individuals that relocate to Spain do not have to pay any taxes on foreign income and gains for the first five years, this is the same with Portugal who offers the same tax exemption for 10 years.
Therefore, due to their tax regimes, countries such as, New Zealand, Portugal and Spain are suited to pensioners.
Whereas countries such as Singapore, which only taxes individuals on local source income and has a low rate of income tax as well as no capital gains, net wealth, estate, inheritance or gift taxes, is more suited to entrepreneurs and global executives.
BDO’s, Global Opportunities report: a summary of tax regimes around the world, is available here.
