Australians pay almost half of their annual income to the tax man in the form of income tax. In fact, that figure can shoot past 50% if you take additional taxes like capital gains tax, general sales tax (GST), fuel tax, and Medicare levies into account. That doesn’t really leave much to enjoy life, so it’s no wonder many people are looking to offshore to help relieve their tax burden.
Companies have been using so-called ‘tax havens’ for a long time to greatly reduce the amount of tax they have to pay. These tax havens allow companies to literally save millions in taxes. However, tax havens aren’t reserved for large corporations. More and more individuals are turning their gaze to foreign shores to ease the burden from the tax man. In fact, many people, especially retirees are packing their things and moving to these finance-friendly areas.
Let’s take a look at some of the best tax havens to live in, including the best tax havens for retirees.
But first, what exactly is a tax haven?
Taking a tax break
Tax havens have been around since Ancient Greece, where sailors used to deposit their cargo at different places with lower taxes to avoid paying large sums of tax when they get to the big cities. This has remained relatively unchanged over the centuries. A tax haven is a country or place that charges little to no tax to companies or individuals who operate both inside or outside their borders, as well as offering a certain amount of financial secrecy to ensure financial dealings remain private and confidential. A tax
There are quite a number of places that offer not only a tax-friendly environment for your hard-earned money, but also a lifestyle-friendly place to settle down. If you’ve ever considered moving to a tropical island, the relaxed tax laws of many islands might just be the excuse you’re looking for to make that dream a reality.
One of many British Overseas Territories in the Atlantic ocean, Bermuda is a very popular tax haven due to its zero income tax. If you’re into watersports, golf, or just relaxing on the beach, then this North Atlantic island is definitely the place for you.
Another Atlantic ocean tax haven, and just off the coast of Florida, the residents of these islands pay no income tax, and especially for retirees, no capital gains or inheritance tax either. The Bahamas is known for its scuba diving spots, and for James Bond fans, it’s also the home of the Thunderball Grotto, made famous by the James Bond movies.
Moving South East, this mountainous paradise in the Indian ocean has an income tax of a mere 15% for residents, while non-residents don’t pay any tax on money earned outside of the country’s borders. Lifestyle-wise, Mauritius has everything from dense rainforests to sandy white beaches, and offers nature-lovers an incredible array of fauna and flora.
British Virgin Islands & Cayman Islands
These two British Foreign Territories in the Caribbean are famous tax havens, charging citizens zero income tax. These are stereotypical Caribbean islands with pristine beaches, crystal-clear water, rain forests, and all the kinds of activities one would expect, including scuba diving, snorkelling and deep-sea fishing.
The link between Central and South America, Panama is not only famous for its canal that links the Atlantic to the Pacific oceans, it’s also a popular tax haven. Panama charges residents no tax on income earned overseas, and its low-cost private health care makes it a great tax haven for retirees. This small nation of just over 4 million people, is a blend of tropics and urban hustle and bustle, from tropical beaches to tall skyscrapers.
If island life is not your cup of tea, the tiny principality of Andorra sits high in the Pyrenees between France and Spain. Residents of Andorra pay anything between 0% and 10% tax, and get free healthcare, making it a place to retire to, especially if you’re a keen skier.
Take the next step
Navigating foreign tax waters can be extremely tricky, and it’s easy to fall foul of the law if you don’t know the intricacies of foreign tax laws. Thus, before you consider putting down new roots in one of these amazing tax havens, it’s important to speak to an expert who can help you find the tax haven best suited to your individual needs.
With years of experience helping people take advantage of foreign tax laws, Wealth Safe will make sure you avoid the massive taxation pitfalls that stop you from enjoying the finer things in life; family, holidays, fancy restaurants, etc. We’ll take care of all the legal requirements, ensure that you are 100% ATO compliant, and massively reduce your tax burden!
If you want more information, give us a call for a free initial consultation.
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Financially modelling your situation. We present your options and outline the possible tax savings.
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