Perpetual traveler – TIN no longer valid

Tax and legal
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Dear Nomad forum readers,

I am a Portuguese national that has been moving around the world as a perpetual traveler continuously with no fixed abode, tax residency nor paying income tax for about 3 three years now, and even though I can not think of where I may be at fault – since I do not reside nor have financial ties/commitments to any country I stay in, and never exceed 3 to 5 months in any – I would like to ask if you would agree that my exact circumstances are fine, especially my relationship with a few financial institutions. As you may know, unless you are a US citizen, which I certainly am now, no taxation by citizenship applies in my case and I am registered as a non-resident with no assets in my home country.
One exception to the above regarding tax residency and income tax payment is that, a few months after leaving my home country, I stayed in Georgia (country) for 9 months, registered as an freelancer and paid the required share of my foreign earned income there. This is also when I registered my broker accounts.

I have no fixed residence, property or any financial ties to my home country, bar a bank account with 500 or so Euros, and the majority of my net-worth is cash and financial assets in the aforementioned brokers (one in the US and another in the UK, more or less $150k for passive investing in financial markets). Apart from that, I get paid 2,000-3,000€ a month for my work as a freelancer paid in a Revolut bank account, and that goes to living expenses and savings.

One matter that leaves me a little concerned is that, like I said, I opened my two broker accounts while I resided in Georgia, with a Georgian TIN (tax identification number) and have not since had a tax residency or any form of registered residency in any other country, and so, even though I get fully taxed on dividends, e.g. no tax treaty between the US and a country of residence, I fear that I may not be compliant in some form due to outdated information. There really isn’t much I can do about this since I have no updated TIN to provide. Should I be concerned about this? Would you advise me to proceed in some way that doesn’t require the obvious (acquiring permanent resident with a new TIN)? My traditional bank in my home country doesn’t seem to care nor asks any questions, but Revolut does trigger a dialog to confirm that the tax residency in the system is correct. Filling out an automatic form (that probably no one reads) explaining that I am a digital nomad with no tax residence has never raised any questions.

Thank you very much for your help.

Best regards,
M.

2

In brief, no.

Provided your country of domicile is happy for you not to have another country where you are tax resident you have done nothing wrong. However financial institutions do not like non resident people and you may find they are not keen to keep your custom. Sadly countries do not legislate against this. so you may be asked for tax residence details in future. I am surprised you have not kept your Portugese tax reference number. The fact you left the country should not negate it and you can provide that.

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Thank you for your message. I haven’t actually had a country of domicile for the last couple of years, but my country of citizenship doesn’t tax me as a non-resident. If I understood correctly, you bring up an interesting point: would my country of citizenship (previously of residence even if I had another afterwards) be ok with me no having a tax residence at all. I should probably look into it.

I have a Portuguese TIN (tax ID no.), I’m just not sure if it is relevant as a non-resident, since I am not taxed, but I am concerned that by using it it would trigger some sort of tax commitment with the country. Also, if my bank asks me to update my tax residency(ies) and I use those numbers, I am basically saying that these are the countries where I am a tax resident, and that is not the case.

4

Domicile is the country of your father’s birth and can only be changed after decades of living in another country and severing all ties with your previous domicile, so you remain domiciled in Portugal. There is also a distinction between residency and tax residency. This varies from country to country, but in the UK you can have a home, family and a job but not be tax resident.

The issue is not national tax authorities - we must follow their laws accordingly - but private companies that set their own rules and send you demands. You simply answer their questions. If they ask for a tax reference you have one. If they ask where you are tax resident you have to say nowhere.

However if you follow the law the tax authority wont be an issue. The bank cant activate the tax authority’s database

5

Oh, I did not know that. I usually just refer to it as citizenship. And yes, I know residency and tax residency are not the same, and you can even have a few of each, but for this purpose, I am thinking residency that triggers tax residency after 183 days.
In any case, Revolut asked me for my “tax residencies” and I added my domicile TIN where I am not a resident nor have tax duties, so I wonder if I did the right thing.
I signed up for an account with my US broker (an international broker, really) when I was a tax resident in Georgia, but that has changed and I want to make sure I’m compliant. When asked to update records, I just tell them I don’t have a tax residency and explain the reasons. I suspect it’s just accepted automatically by the system and no one looks at it, though.

6

The kind of domicile @spam is describing is generally only a relevant concept in common law jurisdictions (e.g. UK, Canada, Australia, and a bunch more). Since you’re from a civil law country (Portugal), it shouldn’t matter that you’re still “domiciled” there.

As long as you’re certain that you meet the requirements of being treated as non-resident, you likely won’t run into too much trouble by giving your Portuguese TIN to financial institutions—including listing it as your tax residence if they won’t take “none” for an answer.

Note: The financial institution will in most cases report your account, including end-of-year balance and the address you have on file, to their national tax authority, which in turn sends this information to AT in Portugal. This alone won’t make you tax-liable to Portugal, but really be 100% certain that you don’t accidentally qualify as a tax resident there anymore (and be ready to back this up with proof) and have properly deregistered when you left.

However, you also shouldn’t claim any treaty benefits—which in my experience is usually a separate question from your TIN and tax residence.

For existing accounts I think the best approach is to just keep what you have on file (Georgia in your case), especially when this does not lead to claiming any preferential source tax rates that you don’t actually qualify for.

If you want to open new accounts, you may run into issues if you need to prove your address, though. Especially since it should ideally match your country of tax residence. But that’s part of the price to pay for not having any home base at all.

Personally, even though I’ve lived a similar lifestyle to what you describe, I always preferred being registered as (tax) resident somewhere, even if I didn’t really qualify as one anymore. Ideally this should be a reasonably low-tax location (if not completely tax-free), and extra points for being in the Schengen area (so it’s hard for anyone to track how many days you’ve actually spent there).

Instead of actually renting an apartment or a room in this location that you barely use, you could also ask a friend there if you could pay for their internet bill and in return use their address for your various banking and investment needs. That would also give you a solid proof of address when that’s needed.

Being able to say you’re a resident somewhere, including submitting yearly tax returns (even if you don’t owe anything), will make life a lot easier—both while being nomadic and in many cases also once you decide to settle somewhere in the future.

2 Likes
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ktrunning thank you you are correct in that domicile is not applicable in all countries, but Miguel raised it

I agree you can put a tax reference on a declaration even if you are not resident but to declare you are resisdent when you are not or to pretend to live somewhere is making false statement and we cant support that. The only issue is whether a bank or other financial institution will let you remain as a customer. I recommend everyone is honest. In my experience banks are OK with honesty

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Hi Thomas. First of all, thank you so much for your comprehensive response, it is very much appreciated and it clarified a number of issues too.

I wasn’t aware of the concept that you described regarding how residency is intepreted in Portugal relative to common law jurisdictions, but I do know that Portugal is one of those countries where tax obligations are based on residency.
In order to ensure that I had none, when it was still required (and it is no longer the case), I appointed a family member as tax representative and changed my status with AT (de-registered, if you will) to assume non-resident status. On top of that, just in case any tax obligations would default to my previous tax residency, Portugal isn’t it and Georgia doesn’t tax foreign-earned income even if you are a resident. I also deregistered from Georgia before I left in 2022, so I guess there is no fall out country to pay income tax to even if I wanted to do that.

Regarding treaty benefits, I suppose you mean like a tax reduction on dividends due to a US-PT treaty. I’m not sure how this would be problematic, but just to be safe, and to make sure it doesn’t trigger some sort of a tax commitment, I try to avoid using my TIN from either country, but especially Portugal, because they do tax foreign sourced income where applicable.

For existing accounts, Georgia always seems like a good option as the default, first because that was my actual TIN when registering my broker and also because there is no capital gains tax on foreign income for Georgia taxpayers. So, if for whatever reason my broker or a bank account reports gains, besides the TIN not being valid any longer, it should lead to no action or demand from the tax authorities. But is it ok to “keep what I have on file”, as you say, even though it is no longer valid tax information? That’s what makes me uncomfortable. I guess it’s one of those “don’t ask, don’t tell” situations, but even if the institution reporting this data to the tax authorities of both countries produces no negative outcome, what if it does? I wouldn’t want to lose access to my funds, be accused of perjury or anything in-between, so it does concern me.

I would also prefer to be a registered tax resident, but the cost/benefit just isn’t there for me at the moment. Not unless any legal implications made me change my mind, which is also why I reached out for feedback.
My life actually improved a bit since the last “forced” residence in Georgia in 2022. Income tax was extremely low, but even had it been zero, I just couldn’t justify the benefits – bureaucratic convenience and reduced dividends by enforcing a tax treaty – with being stuck in a foreign country for half a year. That would change if I had a partner, but presently I don’t, and it would take a concern with the legality of condition to change this in the short-term.

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Using a family address as the correspondence address is not a problem, never was, and I do update my current (always changing) address all the time, but I know you mean the legal permanent address/tax residence.
My Portuguese TIN is valid with a non-resident status. It means I am not liable to be taxed but I am registered as such. Is it correct to claim that it is my tax residency? Probably not in the sense that I am not taxed there, but since no other state has a claim on taxing my income and wealth, it doesn’t lead to nothing. Also, my net-worth is too low for any state to care and my income covers little more than life expenses. I’ve been honest and every time Revolut or my broker asked me about this, I said I am a digital nomad with no tax residency. (My Portuguese bank doesn’t even ask.)

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Yes, that’s what I am referring to.

It’s one thing to bend the truth by providing your last available TIN and tax residency to satisfy a system that requires it. That’s a relatively innocent, victimless “error”.

It’s a completely different thing to claim e.g. 15% US withholding tax instead of 30% based on being tax resident in Portugal when you are not. That would be tax fraud.

In my book, yes—especially if it’s your most recent tax information. I wouldn’t lose any sleep over it. Again, assuming you’re not claiming any treaty benefits based on it, that is.

My point would be to not actually stay there half the year, but still being registered and filing a (nearly empty) tax return every year. Generally, most countries won’t go out of their way to get rid of tax residents, although many may not issue a tax residence certificate either unless you can prove to have met the requirements.

Many countries also have tax residence tests that look beyond the days spent in the country. They may look at subjective things such as your intention to maintain a residence there (e.g. if you keep personal belongings in the country, such as a few items at a friend’s place where you may stay when visiting occasionally).

To be on the safe side I wouldn’t claim treaty benefits unless you clearly meet the tax residence conditions, but if you can use the address of a friend at least you have a stable address you can use for your various financial accounts.

If you were to move back to Portugal in the future and they currently offer a tax scheme for those who have been abroad for at least five years (similar to the old NHR scheme), AT may at least want to see that you have been filing tax returns elsewhere for those five years. So that’s another potential future benefit.

I would not do this unless you need to receive a debit or credit card or something like that. It can only ever raise further questions from the financial institution.

In addition, it may lead to AEOI/CRS reports being sent to the relevant country’s tax department where they see you claim a domestic address. This could lead to tax issues in the relevant country.

While working remotely as you are visiting a country for a few weeks or months usually won’t make you a tax resident there, you are in many (most) cases technically liable to report and pay local tax for income sourced there. The “source” of your earned income (e.g. freelancing income or salary) is not the location of your client, but where you perform the work.

So technically you’re already breaking the law in many countries (as are most digital nomads), but the likelihood of being discovered is very low. But that doesn’t mean you should take actions that make it more likely that you end up on the radar of the local tax authority (such as using a local address for your financial accounts).

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Ah, I see what you mean, but at least in the case of Georgia the requirement (by the book) is to spend that length of time in the country, so if I don’t I am still at fault, and on top of that I have to pay income tax… while not being compliant. Is it much less legitimate to use the TIN while no longer having ties with the country than to use it and not following its rules? I don’t know. I did make sure to cancel my registration and later canceling the TIN (different entities) before I left, now that I think about it – I mean, who knows what kind of excuses they would find to tax or fine active taxpayers that don’t actually live in the country while expected to?

The odds that they would go out of their way to double-check whether a registered taxpayer is or isn’t in the country are probably slim, but even if I don’t take advantage of the TIN to claim a treaty, I’d be benefiting from it in one way or another.

You do make a good point that never came to mind, that applying for a program such as the NHR might require a good past record of absence from the country. One extra point for getting a fixed address or tax home.

There are other countries I could consider, but from my research at the time, tax havens raise eyebrows (and can be expensive to register) and Georgia was the perfect situation because I was paying taxes (so low it didn’t matter), my capital abroad was perfectly safe from that perspective and my status was compliant with common norms. Maybe I’ll have a look sometime to see what are my options currently, but again, if just using the number without claiming financial advantages, e.g. tax treaties, is ok, and since I am fine with my life situation at the moment, all is good for now.

I use my current address on invoices I send the agency that pays my freelancer fees. It’s been fine like this for years, but I will default to my “home address” (family address) just to be safe. Thank you so much for bringing this up.

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