Tuesday Tax: 3 Ways the Tax Man Receives Exchanged Information

Tuesday Tax:

Tuesday tax is a weekly briefing of tax news for people Living and Working Abroad from ProACT Partnership Tax Saving Expat Experts.

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3 Ways the Tax Man Receives Exchanged Information

Have you wondered why your banks, savings institutions and property lawyers are chasing you this last year to Update your ID, address and tax number ?

Because of the internet.

Really. Information technology allows the tax man to exchange hugh amounts of Data with the countries it cooperates with.  

They all cooperate apart from the extremes - North Korea anyone?

Under international law government have agreed common reporting standards for financial information including income, dividends, interest, rentals, royalties, capital gains and inheritance.

The new rules are being introduced since the start of 2016. Already the taxmen around the world are receiving hugh amounts of data on people Living and Working Abroad or investing in overseas business and property.

This new exchange of information covers all forms of income and capital you earn. The information doesn’t even need to be on a tax return. The conveyance lawyer , property agent, company secretary can report the income or gains to a tax man.

There are up to three exchanges of information that take place:

  1. To your country of citizenship. A British person living abroad in Cyprus could have information sent to the HMRC in the UK
  2. To your country of tax residence. A Russian living in Spain could have income reported to Spanish taxman.
  3. If you operate as a contractor or business through an overseas service company information is sent to the tax office of the country the company is based.

How can you avoid failing to declare the correct information in the correct way ? Let’s call it doing a Messi or Ronaldo?

Review your tax reporting and returns. As long as the income and capital information is properly declared on a tax return, then you will have no issues or reviews with the tax man.

Assess Your Risk. Protect your assets including overseas property and business. To protect you and your family from an unwelcome tax investigation in the coming years.

ProACT Partnership Tax Saving Expat Experts offer a free review.