Is there an advantageous tax regime for individuals who have recently arrived in or are only partially connected with the jurisdiction?
As explained above, IT Act incorporates the concept of RNOR in determining the residential status of an individual for the purposes of taxation. Thus, if an individual is an RNOR, his income will be taxable in India only if it is earned, accrued, arising or deemed to arise or accrue in India. Any non-resident individual who starts residing in India, he is more likely to qualify as a RNOR for the first tax year in India. In such a situation only the income, which is accrued or arisen or deemed to accrue or arise in India, will be taxable as against his worldwide income (applicable to an OR).
Generally, there is no special regime envisaged in the legislation for such cases. In case the individual:
- stays less than 183 days in any twelve-month period in Bulgaria
- his centre of vital interest, e.g. close family, employment relationship, immovable property and investments are not in Bulgarian;
she/he would most probably qualify as a Bulgarian tax non-resident and liable to tax only on Bulgarian source income, e.g. working in Bulgaria, interest from Bulgarian banks, income from renting out immovable property in Bulgaria, etc.
In addition, a tax relief for certain income may be envisaged in a treaty for avoidance of double taxation concluded between Bulgaria and another country (currently Bulgaria has 68 enforceable double tax treaties).
Yes, Irish resident non-domiciled individuals may avail of the remittance basis of taxation in respect of their non-Irish / foreign source income and gains, subject to certain restrictions.
This means that Irish source income, and gains arising on the disposal of assets situated in Ireland, will generally be subject to Irish tax, but foreign source income and gains arising on the disposal of assets situated outside Ireland will only be subject to Irish taxation to the extent that they are remitted into Ireland, or are deemed to be remitted into Ireland by virtue of specific anti-avoidance legislation. It should be noted that the remittance basis has been discontinued in respect of income from an employment exercised in Ireland with effect from 1 January 2006.
All individuals taxed as US Persons are subject to the same income taxes. Nonresidents are not subject to income tax on most capital gains or on interest on bank deposits. As noted above, individuals who are not US citizens and are not considered domiciled in the US (separate from the substantial presence test for income taxation) are not subject to gift, estate, or GST tax on non-US property.
Individuals who have recently transferred their tax residence in France benefit from a five-year exemption of ISF on assets located abroad (up to January 1st 2017) and of IFI (as from January 1st 2018) on real estate properties located abroad.
They also benefit from an exemption of gift tax on gifts they receive during the first six years of their residence in France.
Finally exit tax is not due when new resident individuals transfer their tax residence abroad less than six years after their arrival.
1. Forfait tax regime
Individuals that have been non-resident of Italy in at least 9 of the last 10 years can move to Italy and opt for the forfait tax regime, which provides that:
i. All foreign-source income and gains are subject to a substitute tax equal to 100,000 Euro per year;
ii. Foreign assets are not subject to wealth taxes;
iii. Foreign assets are not subject to inheritance and gift tax;
iv. Foreign assets are not subject to reporting obligations;
v. As an exception, foreign-source capital gains on substantial shareholdings realized in the first 5 years of Italian tax residence are subject to income tax according to general rules. As a consequence, during such 5-year period, substantial shareholdings are subject to reporting obligations.
The option for the substitute tax regime is effective up to a maximum period of 15 years. The option can be revoked by the individual, but, if revoked, is no longer available.
2. Impatriate tax regime
The impatriate regime provides, under specific conditions, for a 50% exemption from income tax for Italian-source income from employment and self-employment for the first year of Italian tax residence and the subsequent four tax years.
New Immigrants and Veteran Returning Residents (individuals who have returned to Israel after being foreign residents for at least 10 years) are entitled to a 10-year tax exemption on their foreign sourced income (passive income and capital gains arising from the transfer of assets located outside of Israel) and certain foreign earned income (such as employment and business income), while residents returning to Israel after having lived at least 6 years and less than 10 years abroad, may also be eligible to a 5-year tax exemption on certain foreign source income and capital gains on their assets located outside of Israel.
Individuals that are tax residents in a foreign jurisdiction are not subject to taxable presumed living expenses, provided certain criteria apply.
There are no special tax rules for arrivers.
Foreign executives, specialised foreign staff or foreign research staff that are appointed to work temporarily in Belgium can apply for a special expatriate tax regime. Eligible persons must prove that they perform activities which require a special knowledge and responsibility, thus executive functions. If approved, they are treated as non-residents and are therefore only taxable on their Belgian source income. The benefits are two-fold: (i) certain expatriate allowances or reimbursements of expenses and (ii) the so-called 'foreign business travel exclusion' are excluded from the taxable basis.
British Virgin Islands
The BVI is a low tax jurisdiction and this applies across the board. The tax advantages are set out in the answers to questions 2 to 5 above.
The transitional resident exemption which enables persons who become resident in New Zealand to receive the majority of their overseas sourced income tax-free for 48 months from the date they become tax resident. In most cases, this will enable domestic and overseas planning and structuring to take place over this transitional period. Care must be taken to ensure that overseas structures, such as trusts, that could be taxable in New Zealand on an individual becoming fully tax resident are not used.
The New Zealand transitional residence rules are available to New Zealand residents who have been absent from New Zealand for ten years. The rules do not apply to income derived from active business activities in New Zealand and provision of services overseas.
At the federal level as well as in most cantons, foreign individuals taking up residence in Switzerland for the first time or after an absence of more than 10 years may opt for the so-called "lump sum taxation", provided they have no gainful activity in Switzerland.
Under this regime, Swiss tax is levied on the basis of expenses (amount negotiated with the cantonal tax authorities). In practice, the actual tax basis is determined by an advance ruling from the tax administration of the canton in which the individual wishes to take up residence. There is a practical minimum tax base, even if the expenses as determined above are less than this amount. For federal income tax, threshold of CHF 400,000 applies. As from 2016, expenses cannot be lower than seven time the annual rent or annual rental value. In cantons, wealth tax also has to be taken into consideration as well. When this lump-sum amount is determined, the taxpayer will have to mention it in his/her tax return as a taxable basis. In addition, the taxpayer will have to declare each year his/her Swiss wealth and Swiss-source income (like Swiss real estate property, Swiss shares, Swiss bonds, and their derived income), as well as foreign wealth and foreign-source income for which a partial or total refund of foreign taxes is requested by the taxpayer by virtue of an international tax treaty. Indeed, the yearly final tax due must not be less than the taxes determined on these elements (so-called "control calculation").
10.1 The remittance basis of UK taxation is available to a UK-resident (§1.5-1.7) individual who is neither domiciled (§1.9) nor deemed domiciled (§1.10) in the UK. The effect of claiming the remittance basis for a tax year (§2.13) is that the non-UK income and non-UK chargeable gains (§2.7) of the individual for that tax year are only taxed if and to the extent that they are remitted to the UK (§10.3).
10.2 An individual who has been UK-resident (§1.5-1.7) for a certain number of tax years (§2.13) must pay an annual charge to claim the remittance basis (§10.1). The annual charge is £30,000 for an individual who has been UK-resident for seven or more of the previous nine tax years, and £60,000 for an individual who has been UK-resident for 12 or more of the previous 14 tax years.
10.3 Broadly, the non-UK income and non-UK chargeable gains (§2.7) of an individual are (subject to certain reliefs and exemptions) remitted to the UK if they are (or anything deriving directly or indirectly from them is) brought to, or received or used in, the UK by (or for the benefit of) the individual, or a spouse, civil partner, cohabitant, minor child or minor grandchild of the individual, or any of a class of other prescribed persons closely connected with the individual. Relief may be available where non-UK funds are brought to the UK for investment in a trading company.
There are specific benefits available for individuals entering Austria as a tax residence under specific circumstances.