General International Tax Information


Having a long-term financial plan is essential. High inflation and changes in exchange rates will undoubtedly affect your income and this is precisely why you should take a long term view of things…your income, possible increase in income and expenditure in the future as well as retirement needs.

Consider Offshore Savings

Apart from opening a bank account in your new country, you should consider opening an offshore savings account or offshore bank account for your long term savings and for tax planning. Offshore savings can be in various worldwide currencies.

Many expatriates open offshore bank accounts to avoid income tax in their own countries. You may find opening an offshore bank account to be advantageous if you want to earn interest while keeping funds reasonably fluid in the short to mid-term. You may use your offshore account as a central source from which to send funds to other locations, including an account in your home country.

Tax Nitty Gritty

Taxation laws vary from country to country and may apply to worldwide assets in addition to those assets in the country of residence.

Depending on each country's tax laws, how much tax you will pay varies widely, which is why there is no substitute for research before you leave. The tax ministry or department of your country would most likely list the tax rules for many countries. See that you procure one if it is available or carry out some online research.

Look in to the regulations governing income tax, inheritance tax, wealth or capital gains tax, etc, and also consider whether there are any extra taxes for which you may be liable.

Ensure you are classed as non-resident in your home country as this can have a bearing on how much tax you will pay. Generally, to establish this you have to a certain number of specified days; for example, in the UK if you want to be classified as non-resident then you are required to spend a time period of less than 91 days per year in the UK, averaged over a period of four years.

Once you have acquired non-resident status, you will be exempt from paying tax on income earned outside your home country but still liable on income generated within your home country e.g. from letting out a property.

Seek Professional Advice

Since tax regulations tend to be very complex it is best to seek professional advice from an international tax consultant. An online search or looking up the Yellow Pages should help you find some tax consultants. Ask for references, do a background check and try and visit the tax consultant in person before you decide to go with him or her.

To avoid penalties for non-reporting, expats are advised to take note of the following:

  1. Before relocation, finalize tax-related affairs by asking these questions:
  • When does the tax year end?
  • Will the home country tax expats only on income and gains up until departure or will it be on the entire year?
  • Is relief available under double tax treaties to avoid duplicity on tax payments?
  1. Verify if the employer abroad handles its employees’ tax reporting. Most multi-national companies that do the tax reporting for their employees compute tax rates according to applicable laws in the home country.
  1. Foreign employers who pay overseas pension funds, social security and other state benefits are not required to withhold taxes on these contributions. These contributions do not result to direct present benefits to the employee.

Since tax laws differ from one country to another, expats are strongly advised to seek professional advice from lawyers or tax experts. Tax authorities in the host country also extend guidance on local tax laws that may be applicable to foreigners.