# Can I avoid paying taxes in the EU if I live in one country for 182 days and then live in another for 182 days?



## russspeak (11 mo ago)

So I'm retiring with a limited amount of Social Security and just can't afford the taxes in some of the countries I've looked at (like Spain charging a minimum of 23% on SS as it's considered the same as working income). So far the few I'm considering, like Portugal and Spain due to the very low cost of living, both have a taxable residency limitation - that is if you live 183 days or more there you can be taxed.
SOOOOO, my question is, can I LEGALLY avoid this situation by living for less than 183 day in say Spain, and then living less than 183 days in Portugal (yes I'd have to travel around for a few days in between, lol ;?).


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## Harry Moles (11 mo ago)

What would your immigration status be? You can't do what you're proposing if you're a US citizen without a residence permit - the rules for tourists restrict you to 90 days out of 180 in the Schengen zone.


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## russspeak (11 mo ago)

Harry Moles said:


> What would your immigration status be? You can't do what you're proposing if you're a US citizen without a residence permit - the rules for tourists restrict you to 90 days out of 180 in the Schengen zone.


What I found, at least for Spain, is that there are two types of residency statuses, one is a non-taxed resident which requires you live there for less than 183, and of course the other is a taxable status for those living more than that. 
Sounds pretty straight forward to me, but just wondered if anyone had any experience with this? I can't be the only one who's ever thought of this loophole, lol, although of course it does require having 2 residences, something that would definitely strain my nest egg unless I found really great deals (the alternative being to buy one home and then rent an apartment in the other).


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## Harry Moles (11 mo ago)

You are conflating tax residency status with immigration status. Under what condition would you expect to remain in Spain and/or Portugal for more than 90 days out of 180 days?


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## russspeak (11 mo ago)

Harry Moles said:


> You are conflating tax residency status with immigration status. Under what condition would you expect to remain in Spain and/or Portugal for more than 90 days out of 180 days?


I'm planning on staying less than the 183 days that the requirement said could keep you out of the taxable residency status - from what I read it said you could file for residence PERMIT, so not to include immigration, which allows you to then stay more than the 90-day tourist visa allows.

But if I stay LESS THAN 183 days I'd be legally considered a NON-RESIDENT for tax purposes, but legally allowed to do so under the residence permit. The reality might be that I only stay around 175 days in Spain, then 15 days stateside, then return to live another 175 days in Portugal.


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## russspeak (11 mo ago)

Well after really getting into the weeds (there's something like 20 different resident permits) it looks like the non-lucrative permit REQUIRES you to stay at least 183 days and so pay taxes, and the only one I can find that doesn't is the Golden permit that requires you in INVEST 500,000 euros, only then it seems can you stay less than 183 days and not pay taxes, smh. Guess I'll be looking for another country, I have found a lot of GREAT information about Albania, which is right off the heel of Italy, which is one of the areas I was really interested in anyway, so possibly a win-win depending on the minutiae, lol.


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## Harry Moles (11 mo ago)

You saw what I was getting at - without EU nationality, to stay in the Schengen countries past 90 days requires some form of residence permit, which is quite independent of tax residency.

By immigration status I did mean residence permit, and as you've discovered, broadly speaking the basic options are work, study or buy your way in if you have a lot of money.


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## Moulard (Feb 3, 2017)

Another point that you miss is that 183 days is not some magic threshold which you must pass in order to be a tax resident. 

Many countries will have a range of other measures that can come into play - one can still be deemed a tax resident in a country where one has not set foot for an entire year - the US for example with its US citizens are by definition tax residents... or the AUS domicile rule which has been used to argue someone who is in another country on a temporary visa of any kind has not decisively broken domicile.

The other thing to consider being deemed a non-resident for tax purposes still exposes you to income tax on any income sourced from that country - and the kicker is that non-resident tax rates tend to be higher than resident rates.

The country where the income is sourced will always have the right to tax that income according to its domestic laws, and ... and if there is no income tax treaty in place between the two countries it is not unheard of to end up paying tax to both.

oh.. and under international tax rules a person cannot be without a tax home...which is of course separate to claiming to have no tax home.. which I think is where you are trying to land.


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## Tricky Dicky (Oct 24, 2018)

I am retired and living in Greece. I pay zero tax.


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## Bevdeforges (Nov 16, 2007)

Don't forget that, as a US citizen you are ALWAYS considered "tax resident" in the US. Avoiding double taxation is up to the tax treaty between the US and your country of residence (however determined). Very often, for those on US Social Security, it's the US that takes the first "bite" of taxing your SS (if it is taxed at all).



russspeak said:


> But if I stay LESS THAN 183 days I'd be legally considered a NON-RESIDENT for tax purposes, but legally allowed to do so under the residence permit. The reality might be that I only stay around 175 days in Spain, then 15 days stateside, then return to live another 175 days in Portugal.


That's not how it works. Staying anything over 90 days requires a "long-stay visa" which you would have to apply for each time before entering Portugal (or wherever). 

Then, too, you cite the "tax rate" that would be charged against your US SS - but most tax regimes don't tax income from the first dollar (or euro, or whatever) - there are allowances and deductions for basic living expenses that may apply. Net-net, no, you're not the first person to have thought of the "I'm only living in the country for 182 days a year" ploy, but the reason you don't see much about it is because it doesn't work - for all the reasons people have mentioned here in this thread.


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## 255 (Sep 8, 2018)

@russspeak -- You did not give a full picture, but if your only income is social security, you won't owe any taxes in the U.S. Additionally, as has been previously stated, you need to look at the U.S. tax treaty for any country you are considering -- often you won't owe taxes (or only owe reduced taxes) in the other country. For instance, France will give you a 100% tax credit for any taxes owed, so net tax due to France equals zero and you won't owe any tax to the U.S.

You'll find trying to "play games" will backfire! Even the U.S. won't like it if you do not declare a fiscal residency, somewhere. Because of this, most U.S. digital nomads will claim tax residency in a no/low tax jurisdiction, while they travel the world. Cheers, 255


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## dpdapper (Apr 18, 2013)

Tricky Dicky said:


> I am retired and living in Greece. I pay zero tax.


But nobody in Greece seems to pay taxes.


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## Tricky Dicky (Oct 24, 2018)

Ain’t that the truth!


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## Moulard (Feb 3, 2017)

To be fair, Greece, like a lot of Europe, gets a significant portion of its tax revenue through consumption taxes.

Imagine the howls of outrage if the US introduced a federal sales tax.

But back to the original question at hand, countries tend to either tax pension on the way in, or on the way out...

The tax meta-gamer plans to earn in a country that taxes on the way out, and retire in a country that taxes on the way in and hope that treaty rules do not interfere.


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## remoteinbermuda (11 mo ago)

I believe that Albania has had a long-standing digital nomad visa for stays starting at one year. There are now over 2 dozen countries that are offering similar visas and not necessarily taxing income (if you are considering areas outside of southern Europe). I am on a multiple-year visa and not paying income tax to my host country, which incidently allows tourists to stay up to 6 months now. For the long-term digital nomad visas, some countries do require proof of (self-)employment, but others just require proof of income or ability to support one's self. Some visas are for multiple years (up to 5 with extensions). Several visas are in low-cost tourist places. You could start island hopping for a few years if that suits you.


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## Falconhill (9 mo ago)

You have to declare your income or benefits somewhere. As others have explained there is no such loophole.

I have lived in Spain for most of my life.

In general my advice to everyone who ask me about tax and moving to Spain i tell them the same; stay awsy!!!

Having said that most of the people asking me have assets in excess of 1 million EUR. Those people should really stay well clear of Spain, trust me.

It


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