Perpetual Traveller, Banks, Payment Gateways and Tax questions

Hello everyone, as a new member here and a Perpetual Traveler (PT), I have been forced recently to change the way I do things, due to the FACTA tax laws that are enforced throughout most of the world now. In the past 20 years I have never lived in one place longer than 6 months, except a stint for 18 months in my native Australia. I am a dual citizen of UK as well. So technically I am a true perpetual traveler, that is, not obliged to pay tax, correct? (I make a very modest income.)

My UK bank recently demanded me to declare my tax residency and I could not because I do not live in Britain. I currently live in Sweden for less than six months of the year and am not qualified there either, as you have to live for a whole year. Likewise in Australia, I am not a tax resident and rarely go there these days.

I read the article here about N26, but it demands the same tax residency questions as conventional banks. I can supply an address to get a Mastercard posted to, but technically that would not be a tax residency address. I also have a Transferwise account and was recently issued with a card, but have not used it yet. It’s a very handy service to use between international accounts.

Next year I qualify to apply for my Australian pension which I will do from Portugal, a reciprocating nation, and where I may create one of about three bases around the world. I could declare Portugal as a tax residency, the tax rates are reasonable, but I do not intend to stay longer than a few months of the year, due to ongoing travel writing and documentary projects – hence I would not qualify as a tax resident there either.

I have asked many accountants but most of them do not have a clue. Others who pupport to know, charge alot for their services. What I need to do is consolidate my financial position into one or two bank accounts. I have recently moved from Paypal to Stripe, linked to my US bank account but am always on the lookout for new bank and payment gateways through my website. Charles Schwab sounds like a possibility, my current bank has been Wells Fargo for a long time. I will have to update myself on IRS questions there.

I will probably close my Swedish and UK accounts and open up one in Portugal for my pension. I have to figure out how and if my ongoing earnings are taxable, made from consultations over the internet in different countries. I have read about many solutions to my predicament, but have not found an easy option yet.

My main interest right now is banking and payment gateway options that might be better than Paypal or Stripe. I have a Thailand account linked to Paypal, but the fees for that service from Paypal are much higher than anywhere else. Well this is a bit long, but perhaps covers many issues for others here.

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Hi Phillip!

Forgive my ignorance but I thought FACTA only applied to U.S. citizens?

I don’t know what Australia’s laws are but in the United States we can exclude any income we earn while living abroad from being taxed. The issue is that we can’t be physically in the states for more than 30 days each year.

Have you looked into the Estonian e-visa for your business? You will have to pay their tax rate on income earned but I understand it is very competitive in comparison and you can manage it fully remotely. You would not need to be physically present.

Wishing you all the best – let us know what you end up doing!

-Sara (U.S.A., living in Costa Rica at the moment)

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Hi Sara, the FACTA laws generated in USA have spread in one form or other around the world, forcing declaration of one’s tax residency. I do not live in Australia anyway but it is the same there. I thought the USA was regarded as one of the few countries where any income earned anywhere in the world is taxable? Yes I have looked into Estonia, 20% tax but not really attracted to it. I have been to Costa Rica a few times but never enquired about tax and banks at the time, and have heard that its an option, do you know much about that?

Hi again Phillip,

The U.S. makes us file taxes every year but the Foreign Income Exclusion deduction means that we can exclude our income up to a certain level (I forget what it is, more than $125,000) from being taxed, as long as we meet the physical presence test.

Yes, you should look into Costa Rica and their “pensionada” residency program. I believe the big advantage is that there are no taxes on income you earn outside of Costa Rica, which would include your consulting business. But I heard you must visit every 2 years to keep it renewed, and your pension would need to be deposited in a CR bank. And to qualify, your pension must be a certain amount each month, around $1,000 USD, a history of deposits must be shown to renew.

I hope this helps!