Can one relocate to Romania or Bulgaria to save taxes

39 posts in this topic

Folks,

 

Situation: 

1. German citizen, self employed earning between 20 to 50k pa.

2. Willing to relocate anywhere sunny to save taxes

3. Also expect about 30k profits from stocks in 2021

 

Bulgaira has 10% corporate tax and Romania charges 1% of revenue to micro companies.

 

Was wondering if someone explored cheaper tax options like this to relocate?

 

I love Balkan area btw and have no personal issues moving there.

Cheers!
Kay

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Cyprus is offering "non-domiciled resident" status for 17 years which means that any income from abroad isn´t taxed (except for 2,65% for health insurance if you don´t hold a S1 form proving public health insurance from another EU country). Dividends and interest aren´t taxed anyway (except for a defence contribution of 17% which non-doms are exempt from). Corporate tax is 2.5% - 12.5% (depending on the line of business). English is spoken widely and can also be used to communicate with authorities. Then there is Northern Cyprus which doesn´t belong to the EU (well, it formally does but de facto it doesn´t). No idea about their taxes though and whether you can communicate with Authorities in English. But life is cheaper there.

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5 hours ago, kapil354 said:

I love Balkan area btw and have no personal issues moving there.

 

Fine if you like countries with next to no infrastructure, corrupt governments and lots of crime. Quaint for a holiday in the right place by the sea perhaps, but living there long-term is a bit of challenge AFAIK.

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1 hour ago, optimista said:

 

Fine if you like countries with next to no infrastructure, corrupt governments and lots of crime. Quaint for a holiday in the right place by the sea perhaps, but living there long-term is a bit of challenge AFAIK.

 

Mostly true, but Romania has lowest crime rate than Germany, and probably the fastest Internet average speeds in Europe, and some pretty nice locations.

Can't argue about corruption and the rest of the infrastructures :D

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5 hours ago, Alexnf said:

Romania has lowest crime rate than Germany...

:D  and excellent at collecting stats...

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6 hours ago, Alexnf said:

 

Mostly true, but Romania has lowest crime rate than Germany, and probably the fastest Internet average speeds in Europe, and some pretty nice locations.

Can't argue about corruption and the rest of the infrastructures :D

😂❤️

Sounds just like here! ( not sure about Internet speeds but it might be our location under a mountain! What do I know?😂)

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Kay,

 

You say you are 'self employed'. Usually self employed people need to be physically present. Countries have regulations concerning if you a 'deemed' to be a resident and therefore subject the taxation in that country. Often this can be time based, or even something a simple as renting an apartment makes you 'resident'. Leaving Germany after being here for 10 years can trigger 'exit taxation', which I believe is more for people who own businesses or who have assets.

 

Some practical points to consider:

1. Leave/arrive at the start of a year, so no partial taxation in each country.

2. You might want to give your destination a 'try' first, e.g. a couple of week vacation to at least get a feel for the place. Tourist vs someone living there are two different things.

3. Health care. Does it work? Does it suck? How much does it cost?

4. Is self employment allowed? Does it attract special taxes (social contributions, trade taxes, ...). What licence is necessary to have such a profession etc.

5. What happens if you want to stay? Maybe you find a partner there or have kids. Becoming a citizen of certain countries can be quite hard.

6. Maybe you even get a camper van, mobile internet, and just drive around Europe for a year or so if you have one of the 'work anywhere' jobs. Sounds fun...

 

 

 

 

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7 hours ago, scook17 said:

Maybe you even get a camper van, mobile internet, and just drive around Europe for a year or so if you have one of the 'work anywhere' jobs. Sounds fun..

Yes, and you can get quite comfortable mobile homes already for less than € 350000.- . https://www.youtube.com/watch?v=w-d0BfwpbvM

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Portugal has some nice benefits for foreign specialists (50% reduction on income tax) and retired people.

If you make your own company there, I think the first 3 or 5 years have reduced corporate tax, half the normal, I think.

Also, the first 25.000€ profit pay only 12.5%-17% tax, depending where you settle within the country.

If you move to the Portuguese atlantic islands, I think corporate tax is 5%.

And I would dare to say much better place to live than the Balkans.

Speaking of Bulgaria, I've several friends from there and I never heard someone speak so badly of their own country!

 

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54 minutes ago, MikeMelga said:

Portugal has some nice benefits for foreign specialists (50% reduction on income tax) and retired people.

If you make your own company there, I think the first 3 or 5 years have reduced corporate tax, half the normal, I think.

Also, the first 25.000€ profit pay only 12.5%-17% tax, depending where you settle within the country.

If you move to the Portuguese atlantic islands, I think corporate tax is 5%.

And I would dare to say much better place to live than the Balkans.

Speaking of Bulgaria, I've several friends from there and I never heard someone speak so badly of their own country!

 

There's also something about 10 years without paying taxes in Portugal if you move there?  Just don't forget to import your car in the first year after your anmeldung because otherwise you pay through the nose.

 

As for Bulgaria, your friends may be speaking badly of it because there's poverty and unemployment.  That is not an issue for somebody coming from abroad with foreign pension or home office income.  My brother in law is from Bulgaria and they support his mom there and might retire to there.  One of my brothers ex's also has a house there and will probably retire there.

 

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Just now, LeonG said:

 

There's also something about 10 years without paying taxes in Portugal if you move there?  Just don't forget to import your car in the first year after your anmeldung because otherwise you pay through the nose.

I think that changed in the past year but I am not sure exactly how. I think it was replaced with the rule that if you are a specialist (within a list) you get 50% income tax down.

 

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4 hours ago, LeonG said:

As for Bulgaria, your friends may be speaking badly of it because there's poverty and unemployment.  That is not an issue for somebody coming from abroad with foreign pension or home office income. 

Not too sure about that.

If a country has poverty and unemployment the services are inevitably less good. Things like health care, judiciary, police, education, all sorts of infrastructures.

Not saying that residing in Bulgaria is bad per se, but even if you have a good income, residing in a poor area gives you disadvantages.

 

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For me Bulgaria and Portugal would already be out of the question because of the language spoken. Who wants to learn another foreign language in retirement? At least I don´t. That was a major reason why I chose Cyprus (not the only one though).As it used to be an English colony you can even file your taxes in English (should you have to pay any).

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2 hours ago, Gambatte said:

Not too sure about that.

If a country has poverty and unemployment the services are inevitably less good. Things like health care, judiciary, police, education, all sorts of infrastructures.

Not saying that residing in Bulgaria is bad per se, but even if you have a good income, residing in a poor area gives you disadvantages.

 

I'm not planning on moving but if I was, I would mostly be worried about health care and crime.  Many people who move for retirement move because they don't have a lot of money so living in a country with bad infrastructure is a trade off for not living in poverty.

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Could it be that bad infrastructure, lacking healthcare and so on might be a result of low taxes?

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42 minutes ago, Elljay said:

Could it be that bad infrastructure, lacking healthcare and so on might be a result of low taxes?

 

If the economy is poor and many of the people are unemployed or underemployed, it's not so easy to raise the taxes.

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2 hours ago, LeonG said:

Many people who move for retirement move because they don't have a lot of money...

or they prefer countries with warmer climates and better food :). 

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2 hours ago, Elljay said:

Could it be that bad infrastructure, lacking healthcare and so on might be a result of low taxes?

And corrupt bureaucracy. And an unwillingness to face up to the reality that it is up to local people/ citizens to get their act together, be responsible and civil-minded to improve their country.

I live in Greece! 

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55 minutes ago, LukeSkywalker said:

or they prefer countries with warmer climates and better food :). 

 

Yes, I don't really get that. I know a woman who moved to the Canary Islands and now lays in the sun until red and crispy and whines whenever it goes below 20.  Too hot for me and perfectly happy with German food.  If there was a country where the temps are always 10-20 degrees, I'd be tempted. 

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