Trading US & european markets from a fiscal heaven

[PArmando]

Hi !
There are several countries that only tax income that is generated within their territory. Therefore, foreign source income is not taxable in these countries, and there is not taxation on capital gains of foreign accounts.

Though, I'm worried about a thing, concerning trading US and european stocks and futures. Somebody told me that if you reside in such a countries, they don't charge any taxation on your capital gains, but in this case your broker applies the US or european taxation directly, so that you haven't any real advantage trading from there as a resident. This guy is not trustworthy, so I ask here. I hope there's a trader living in these countries or someone knowledgeable....

I was thinking to Panama, in particular. European fiscal heavens are extremely expensive. Best Caribbeans islands have the same problem, and pacific islands are too isolated. Uruguay was a good pick, imho, but now the new government has changed fiscal laws and foreign income is charged. Belize is undeveloped. Panama seems to me the best haeven left ......

thanks a lot

 

[H2O]

Hi !
There are several countries that only tax income that is generated within their territory. Therefore, foreign source income is not taxable in these countries, and there is not taxation on capital gains of foreign accounts.

Though, I'm worried about a thing, concerning trading US and european stocks and futures. Somebody told me that if you reside in such a countries, they don't charge any taxation on your capital gains, but in this case your broker applies the US or european taxation directly, so that you haven't any real advantage trading from there as a resident. This guy is not trustworthy, so I ask here. I hope there's a trader living in these countries or someone knowledgeable....

I was thinking to Panama, in particular. European fiscal heavens are extremely expensive. Best Caribbeans islands have the same problem, and pacific islands are too isolated. Uruguay was a good pick, imho, but now the new government has changed fiscal laws and foreign income is charged. Belize is undeveloped. Panama seems to me the best haeven left ......

thanks a lot

As European citizen, it looks like your from Italy, I'd suggest looking at Gibraltar, Campione (Swiss/Italian border) or Monaco...

 

[Jack o'Clubs]

Malta might work for you. You pay tax on monies remitted to Malta (at 15% flat rate) as a permanent (foreign) resident. If you trade through an offshore broker you pay no tax on income or gains unless you bring it into the country. Presumably it also has advantages for you in Italy as it's easy to get to.

There's a website called lowtax.com which is a useful resource for country by country data, although as with any free internet sites I wouldn't count the information on it as 100% reliable.

 

[PArmando]

Thanks for your suggestions. Campione, unfortunately, is forbidden to italian citizens. A specific law forbids italian citizens (born elsewhere) to obtain Campione's residence. Non-italian people only can become resident in Campione (even though is a very expensive spot to buy or rent a home). Monaco is even more expensive. I need a large home with a courtyard for my pets. Such a home in Monaco has a crazy price.
Malta, I read, applies a world wide taxation, and the flat tax is too near to the italian one, so there isn't a big advantage. Andorra... I like the sea.
Gibraltar can be interesting. I'll search for more infos.

Though, my main question was another one. Maybe H2O can dispel my doubts. Let's say that I become Gibraltar's resident. Then I open an InteractiveBrokers or Tradestation account for trading US futures. My fear is that there is an american law compelling the broker to apply american taxation for those resindent in a fiscal heaven. The like for Eurex or UK futures ...
In Italy there's something similar (if a bond purchasing order comes from a fiscal heaven italian brokers charge italian taxation. Dunno for italian futures).

many thanks

 

[Jack o'Clubs]

Malta doesn't apply world-wide tax as long as you enter under the correct residency status - I've had professional advice on it as I'm considering a move there. Fair enough though if the 15% is the same as Italy.

 

[PArmando]

thanks Jack, I was not well informed about Malta. Indeed capital gains taxation in Italy is 12.5 % now (almost a fiscal heaven), however next year it will become 20 %, and further rises are planned in the next future. In few years capital gains taxation in Italy will be the same than in the rest of Europe or even higher ...

 

[H2O]

Thanks for your suggestions. Campione, unfortunately, is forbidden to italian citizens. A specific law forbids italian citizens (born elsewhere) to obtain Campione's residence. Non-italian people only can become resident in Campione (even though is a very expensive spot to buy or rent a home). Monaco is even more expensive. I need a large home with a courtyard for my pets. Such a home in Monaco has a crazy price.
Malta, I read, applies a world wide taxation, and the flat tax is too near to the italian one, so there isn't a big advantage. Andorra... I like the sea.
Gibraltar can be interesting. I'll search for more infos.

Though, my main question was another one. Maybe H2O can dispel my doubts. Let's say that I become Gibraltar's resident. Then I open an InteractiveBrokers or Tradestation account for trading US futures. My fear is that there is an american law compelling the broker to apply american taxation for those resindent in a fiscal heaven. The like for Eurex or UK futures ...
In Italy there's something similar (if a bond purchasing order comes from a fiscal heaven italian brokers charge italian taxation. Dunno for italian futures).

many thanks

As far as I know, US brokers (and IB, as far as I know) do not tax you directly.
But, I'm not a tax advisor, so if you;re seriously considering this, look for some profesional help in stead of relying on a public message board...

 

[FedePresident]

thanks Jack, I was not well informed about Malta. Indeed capital gains taxation in Italy is 12.5 % now (almost a fiscal heaven), however next year it will become 20 %, and further rises are planned in the next future. In few years capital gains taxation in Italy will be the same than in the rest of Europe or even higher ...

fear of Prodi's taxations ? :cheesy:

 

[Directional]

US brokers do not withold US tax. Thats what the W8-BEN form you sign when you open an account is all about - you're opting out of the US tax with-holding system as a foreign resident.