Quote from: freigeist on December 12, 2018, 08:36:25 PM

I don't think people find it complicated i think people are afraid! Wink

I agree. There is no problem with being afraid of something you don't know. But I do find it stupid to be afraid and leave it there instead of researching the subject deeper! The fear factor mosty comes from people spreading half information spiced with sentences like 'the taxman has seen it all, and knows all'. I would like people to be better and more factually informed about this topic.

Quote from: freigeist on December 12, 2018, 08:36:25 PM

Quote from: kassad1 on December 12, 2018, 08:39:28 AM

It DOES make your income not taxable in your country of residence because that's what the treaties say.

Well the treaties say it but usually is more important what your taxman thinks of it
because there is a great change that to prove this you will have to go to court against taxman and people are afraid and reluctant to do this

Bit of correction here. It is definitely NOT 'Well the treaties say it, but it's more important what your taxman thinks of it'. International tax treaties between your own country and others ALWAYS override your local tax regulations. So if the international tax treaty says your income is only taxable in the UAE then your local tax authority can't challange that. PERIOD

What they CAN do in this case is examine if the truthness of what you are saying could be challanged. The steps they can examine have already been discussed earlier, but I'll quote them here once again, because this is important:

Quote from: kassad1 on December 12, 2018, 08:39:28 AM

Let's put us in their (the tax authority's) prospective, and let's look at something as straightforward as a rent extremely closely. What can you check?
1. Can the examined person (you) prove he really rented a storage room? - Yes, he can show a wire transfer from his/her own bank account to the storage room providers account as proof that you can check.
2. Could the person sublet the storage room for profit? - Yes, if the storage room provider doesn't forbid subletting. If you as the taxman are being extremely thorough you contact the storage room provider and ask if subletting is allowed, and to further back nr.1 if they can confirm that they have the examined person as a client. The answer is yes for both.
3. Can you as the taxman find anything that would indicate that the income that was declared to be received as rent was in fact received for something else in reality? - No you can't, as you can't trace where bitcoin or crypto transfers originate from. Plus everything else that needs to be in place for the declaration to be true is in place (the storage room is really rented by the examined person and it is possible to sublet for profit).

There isn't anything for you as the tax man to further investigate or documents you can request when we are talking about a private person being examined.

So by this point the taxman examined if the the truthness of what the examined person is saying about where the income is from could be challanged. In contrary to popular belief about the 'regarding taxes if the taxman says so, then you are guilty until proven otherwise' this doesn't work like: They can randomly charge you with whatever they think up, and you have to start defending yourself in court. They can only 'assume' something based on factual evidence that is allowed them to do so by local laws governing their operations.

I'll give you an example. Every country has laws that describe how they locally define 'tax residence'. In some countries a local address is sufficient, in others various different life circumstances are needed. Let's say you have moved to a new country but you keep your old address because you are paying a mortgage and the bank needs the local address to be on your account. You are working in the new country, your family is living with you in the new country, you are really living there. All of a sudden you receive a one time income sum from your old country, let's say one of your relatives in your own country died and left you an envelope at an inheritance lawyer with some cash in it. You now should be subject to inheritance taxes in the new country because you are living there. But the tax authority of your old country can challange that and 'assume' you actually still have tax residence in your old country because you have an address there, and this is enough for them by local laws to be allowed to 'assume' a local tax residence. Now they have to give you an opportunity to prove your truth that you in fact live in a new country. Local laws describe what they can ask for and have to accept as proof of you are really living in a new country. You now show them your new address, your new job, you tell them you only still have the old address, because you are still paying a mortgage and the bank needed the address to keep your account. If you can provide these things there is no going to court. They HAVE TO accept it by law. Know if you don't have a job or can't provide proof of your new address or you can't fullfill the required proof providing procedure for the tax authority THEN and only then you are going to court having to defend your truth.

Less scary? I hope so!

So back to this case, everyone who thinks it can work like:
Taxman: - Please declare source of income.
You: - I declare this income is rent received for immovable property from the UAE.
Taxman: - COOOOOOOOOURT!!!!!

It can't.

They can only ask for what is described in the above qouted part and nothing more.

Quote from: freigeist on December 12, 2018, 08:36:25 PM

I would suggest anyone that want to try such activity to consult a local tax advisor or lawyer
to avoid any trouble later.

I agree. I'll say something even better. You should go to a tax advisor and go through this thread together. Let them review if they see something problematic in what I say in respective to your own country's laws. If they do please share here! I would be a lot happier to discuss that than reading posts like 'the taxman is always right' and 'double tax treaties don't work that way' (instead of simply reading the passage of Immovable Property of the double tax treaty between their own country and the UAE).

I'll say something EVEN better. After you have discussed it with your tax advisor. Get your feet wet with a smaller amount. I'm actually doing that. The taxyear ends on the 31th of December. So I have actually sent the yearly payment to the storge company in the UAE and waiting for confirmation of receival. Once that is done I am sending 5000 worth of crypto to an exchange where I have KYC'd account and forward euros to my local bank account. This way the receival of income to the exchange still falls in the 2018 tax year and I can see what happens with this smaller amount. Worst case scenario I'll be taxed for 5000 but I really can't see how. If everything works out I'll do the full amount in 2019.