Personal income taxes with citizenship by investment

Many clients have approached asking us which Citizenship by Investment (CBI) countries have personal income taxes (PIT). This is also a very common question. Today we will shed some light on the personal income taxes with citizenship by investment schemes. In short, we will try to address which CBI countries have zero personal income taxes, when you buy a passport.

We will explain only about personal income taxes, we will not discuss other types of taxes such as inheritance, capital gains or corporate taxes.

In general taxes regimes is all about residence based or territorial. There are only less than 20 countries and territories in the world that have NO personal income taxes. These taxes depend on local or foreign income.

Agents promoting CBI schemes will only be able to blindly tell you, there are no personal income taxes, but in reality CBI countries do impose personal income taxes.

Vanuatu, St Kitts and Antigua are only three countries that have NO personal income taxes on both local and foreign income. If you pursue a  passport that comes with no personal income tax, these countries are the most desirable ones. All other CBI countries will exempt you from personal income taxes ONLY if you are a non-resident citizen.

It is true, all CBI countries do offer zero personal income tax for non-resident citizens, but there exist a slight difference between these countries based on local or foreign income and resident/citizenship status.

Take a look below

No Personal Income Tax

Only 3 countries offering CBI schemes have no personal income tax on both local and foreign income. This means you go live in these countries, you pay zero personal income tax.

1. Antigua and Barbuda
2. St Kitts and Nevis
3. Vanuatu

These three countries do not levy any personal income taxes based on residency and citizenship.

Taxes on Local Income

• Non-resident individuals – NO
• Resident Citizens – NO
• Resident Foreigners – NO

Taxes on Foreign Income

• Resident citizens – NO
• Resident foreigners –  NO
• Non-resident Citizens – NO

Personal Income Tax

Personal income taxes exist on local and foreign income, the only exception is non-resident citizens who are given exemption. This means if you obtain a CBI passport and go live in these countries, you will be taxed.

These 9 countries running CBI schemes apply residence based taxation.

1. Dominica
2. Grenada
3. St Lucia
4. Montenegro
5. Moldova
6. Malta
7. Cyprus
8. Bulgaria
9. Turkey

Taxes on Local Income

• Non-resident individuals – YES
• Resident Citizens – YES
• Resident Foreigners – YES

Taxes on Foreign Income

• Resident citizens – YES
• Resident foreigners –  YES
• Non-resident Citizens – NO

 

For specific information we ask you to consult international tax specialists.

Please contact us for more information.