No undue taxes through the Caribbean citizenship programmes
Published at: 24/04/2019 10:42 am
There are now two major accounting firms stating that citizenship by investment programmes of the Caribbean island nations do not bring undue tax advantages.
First, the global tax advisor EY (Ernst & Young) published their report in early March, now the UK based Smith and Williamson released their findings. After the analysts carefully compared the different citizenship, residency and tax residency issues, they found that the obtained second passports have little or even no effect on an individual's tax liability, according to the Wicnews.
The recent report distinguished citizenship and tax residency and declared that the citizenship by investment programmes of St Lucia, St Kitts and Nevis or Dominica are not dangerous tools of tax evasion and pose no risk of tax avoiding or misreporting under the CRS (Common Reporting Standard). “In conclusion, Smith and Williamson believe that Citizenship by Investment does not present a risk to facilitating tax evasion, as citizenship alone is insufficient to secure tax residency of a country.”
According to the opinion of the well-known tax-advisors, taxation is related to the taxpayers' tax residency and not citizenship. "Although an individual can have citizenship rights or residence rights in several different countries, usually only countries where an individual is resident for tax purposes can tax the individual’s worldwide income and gains."
Practically, if someone obtains the citizenship of the Caribbean states by investment, it does not mean that the person is a tax resident of the country of his or her new nationality. Meanwhile, the place of tax residency depends merely on the time the individual spends in jurisdictions or the activity which generates the income. But citizenship in the case of the most countries does not determine the amount of tax or the way of paying tax except for example in the USA and Eritrea, where the citizenship is related directly to each passport holders taxation.
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