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No tax on foreign income? - Page 2


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  #11 (permalink)  
Old 29th January 2014, 10:30 AM
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The OP is Swedish so US rules don't apply. Any income you derive in the Philippines is subject to Philippine income tax. I'm not certain but I don't think the Philippines taxes you on your worldwide income like the US and many EU countries. So if you live in the Philippines any money you earn outside the Philippines is only subject to taxation in the country where you earn it. But can you live in the Philippines and work outside at the same time?

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Old 29th January 2014, 11:05 AM
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You can live in the Philippines and work abroad. OFWs do it all the time. OFWs do not pay Philippine Income Tax on their overseas earnings. I do not know if they have to pay local taxes where they are working or not.

Now if you became a Philippine citizen and then worked abroad I would think that you would fall into that category. But it is extremely difficult to accomplish that (getting Philippine Citizenship). Residency does not constitute citizenship.

I have set up my household in the Philippines and work abroad. As a US Citizen, I still have to pay US Income tax and would also have to pay State Income Tax (if my home state has that, I have Florida as my home state and they do not have State Income Tax).

I know of several Expats (British, Aussie, Belgian) that are doing something similar to myself. I think that the Brits have a tax advantage for living abroad vs. in the UK. I do not know how their taxation works but do know that they are not paying Philippine Income Tax.

Also, as a US Citizen, if you retire overseas, you are not eligible for the FEIC as your retirement pay (401K, pension, etc.) is generated in the U.S.
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Old 29th January 2014, 11:53 AM
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Quote:
Originally Posted by jon1 View Post
You can live in the Philippines and work abroad. OFWs do it all the time. OFWs do not pay Philippine Income Tax on their overseas earnings. I do not know if they have to pay local taxes where they are working or not.

Now if you became a Philippine citizen and then worked abroad I would think that you would fall into that category. But it is extremely difficult to accomplish that (getting Philippine Citizenship). Residency does not constitute citizenship.

I have set up my household in the Philippines and work abroad. As a US Citizen, I still have to pay US Income tax and would also have to pay State Income Tax (if my home state has that, I have Florida as my home state and they do not have State Income Tax).

I know of several Expats (British, Aussie, Belgian) that are doing something similar to myself. I think that the Brits have a tax advantage for living abroad vs. in the UK. I do not know how their taxation works but do know that they are not paying Philippine Income Tax.

Also, as a US Citizen, if you retire overseas, you are not eligible for the FEIC as your retirement pay (401K, pension, etc.) is generated in the U.S.
The problem the OP has is that he is trying to avoid paying tax on his worldwide income to the Swedish government. To acheive this the OP needs to become a non-dom by taking up a foriegn residency. The OP wishes to/is working in Thailand. The OP also wishes to avoid paying tax to the Thai government by becoming a Philippine resident because he has been misinformed that there is no tax in the Philippines, this is only true if you are retired. In the UK you can elect to pay your tax either to the UK government as worldwide taxation or to the Philippine goverment, you choose which is the lesser. The advantage of being retired in the Philippines is that you can elect to have your state pension paid in the Philippines at 0% tax and then retain your approx 10,000 UK tax free allowence to use against any UK earnings, say a UK private pension, income from house rental etc.
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Old 22nd February 2014, 07:53 PM
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Thanks again for the replies everyone.

Just to clarify:

I am not a US citizen or resident and therefore would not be eligible to pay any tax in the US whatsoever.

I am going to enter (and become a resident) in the Philippines by obtaining a SERV (Investor Visa).
I make no money whatsoever in the Philippines or from any Filipinos. I run an e-commerce website and I sell to Europeans.

Would I still need to pay tax in Philippines?

By the way, I spoke to a Filipino attorney a while back and he said that the Philippines only tax territorial income
(which would mean that only income derived within the Philippines would be subject to taxation).


Last edited by stolpioni; 22nd February 2014 at 08:04 PM.
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Old 22nd February 2014, 08:29 PM
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Originally Posted by stolpioni View Post
Thanks for the replies guys.

I think I need to clarify a little bit though: The reason I need to be an official "resident" in the Philippines is because of the tax purposes.

If I become a resident in Thailand, I'd have to pay Thai tax. If I'm a resident in Sweden (even though I live overseas), I'll have to pay Swedish tax.

So the reason I picked Tondo was because the rent is cheap. I'm not actually going to live there. I just want it to look like I'm living there, on paper.

Do you think this would work?
Just a quick note here and this thread will be closed:

If you have actually been to the Philippines in the past-it certainly was not in Tondo. Moving to Tondo or any place like unto it, you will not live long enough to make the first trip to your bank. Better do more research on a better place to live

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