Questions on Foreign Bank Account Taxes

[pokerprop]

If you open bank accounts somewhere other than county of citizenship / residence and collect affiliate payments there. Do these countries want taxes?

My question has nothing to do with avoiding taxes. I just can't get 17 wires from 17 different gambling sites in my home country. In the past was not an issue because had a business partner for those where it was a non issue and I got one wire. Now trying to figure out how to do things solo I'm all sorts of confused.

[thefarang]

Depends. It's probably going to come down to whether or not it can be considered income in that country. For instance, if you open up a UK bank account and deposit funds from a UK poker room or from a UK advertiser, that might be considered earning the income in the UK and you may owe taxes.

[Sebastian]

Usually bank location has nothing to do with tax, although it can in some instances.

A lot of countries are happy to offer bank accounts to international citizens, like the United States. Even though you are not a fiscal resident of that country, they will gladly accept your money.

What matters is your professional activity, and where you work, not where you store the money.

[leporello]

Really depends on the country. For example Israel have a rule that as soon as you move to Israel (with the intention of staying there), you are considered a fiscal resident. However, new overseas residents get a ten year tax exemption on any income earned outside of Israel.

The laws vary greatly from country to country. If you're in the EU, as soon as you move to a new country you are considered a fiscal resident and are eligible for tax there (this is all from memory so may not be 100% correct, just a general idea).

[stillshadow]

A lot of countries are happy to offer bank accounts to international citizens, like the United States. Even though you are not a fiscal resident of that country, they will gladly accept your money.

Wow, if you know of even a single bank outside of the US that is happy to set up accounts for US citizens I would love to hear it. The IRS has bullied non-US banks so heavily in the past few years with mumbo jumbo that they're afraid to even offer accounts to US citizens at this point.

[leporello]

I assume he means if you're living outside of the USA.

[stillshadow]

I assume he means if you're living outside of the USA.

Ah, oops.

[rakebackengine]

Very easy to set up bank account in Estonia, even if u are from the US and don't live there permanently

However as I understand US taxes US citizens in their world wide income.

One way maybe, setup a company in BVI or belize and then u could bank in hong kong, isle of man or singapore for your 'overseas company' but as soon as u take dividends (if u are American) then u need to pay US tax on that

But like always consult with a professional first

Tim

[rakebackengine]

And based on props question, no taxes would need to be paid locally in BVI or Belize (not 100% sure about iom) and the bank (which us located in a seperate jurisdicion) won't take anything

[pokerprop]

I appreciate the responses here guys, thanks. To be clear I'm not looking to avoid tax. What I want to understand is a scenario like this:

1) Deposit $1,000 somewhere abroad.
2) send all affiliate payments there.

Every month I send everything collected (leaving my $1,000 balance) to my bank account in Thailand. I pay the same tax to Thailand either way, and for the US I file my 27 page rap sheet with the IRS and Treasury department just the same. Nothing changes (and not looking to hide anything) - I'm just curious the tax implications in the country the money is flowing through. It doesn't seem logical to just disregard and proceed tax wise as if everything had been paid straight to Thailand. Perhaps it is logical though I don't know.

I'm still fairly certain my best plan is going to be:

-Thai Ltd.
- owns UK Ltd.

In which case is non issue. The tax rate is lower than the US and lower than Thailand by a small margin (nothing aggressive at all). Also the UK VAT laws seems nice as most of the affiliate payments come outside the scope of UK VAT due to locations. UK has no dividend withholding from companies managed abroad, and Thailand corporate tax laws exempt foreign dividends from CIT when a list of conditions are met which will all be met here. So seem I just pay CIT in UK (24% schedule rate for 2013 with proposal to progressively lower it) and have that money in the Thai Ltd. with no additional taxes owed on it.

In Thailand $95,100 annual salary gives me a 23.6% effective tax rate. In the US I'm exempt on first $95,100 of income. So it seems like:

24% corporate tax (UK)
23.6% Personal tax (Thailand)

Then if I do like $50,000 per year in side business that can all go direct to Thai company which the effective tax rate will end up something like 18.5% on that portion. (it will go up in a hurry if doing larger).

It seems like this is the best plan. UK gets tax on gambling profits (makes sense and all to me as they're the one's friendly for gambling), Thai gets tax on work done here - which makes sense as this is where I live. And US gets a 27 page thank you for caring about me so much while away that they wrote so many complex words to ensure my fair dose of freedom is received.

I was just curious however on the alternatives and thinking about it the idea of just opening random bank accounts all over was really confusing.