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Opening a bank account.


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Jimone

Hi all, 

I have a thorny question; first, some context, my wife and I live in Australia; I am an Australian by birth, and my wife is a dual citizen of the Philippines and Australia. We have a BPI account in both names for our home loan at the moment. We are moving to Brazil to work for a Canadian based company in the mining field, and the company is happy to pay my wage into any account. So I wonder if we open an account in my wife's name in the Philippines, we can have my pay deposited into that account and keep it separate from our Australian bank accounts. We will not be citizens of Australia or the Philippines for tax purposes. What will she need to bring to open an account, and does anyone think it will be a problem? Also, what bank would be best?

Thanks in advance for any replies.

         

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Chris24

Bottom line up front:  I am not a tax expert, but it seems highly unlikely that between Australia, Brazil, Canada and the Philippines, one or more countries don't have tax claims on your and your wife's income.  Of course having a claim and finding out about the income aren't the same thing.

I would not have your and your wife's wages paid into the same account, your situations (and corresponding potential pitfalls) are different and keeping the money separate is probably a prudent step to take to preserve a good audit trail and avoid unnecessarily entangling both spouses into one spouse's potential tax issue.  Maybe even set up a special account for each of you in just your individual names to receive your individual wages. 

You might double-check with the employer in Canada to confirm what source country they consider to apply for the wages to be paid, and who they report it to, and then you might check with an Australian and/or Philippine tax attorney.  The Australian Tax Authority website says that generally, Australian residents are taxed on their worldwide income.  (it uses the term residents rather than citizens) .  

Source:  https://www.ato.gov.au/Individuals/Income-and-deductions/In-detail/Income/Foreign-income-of-Australian-residents-working-overseas/

 

A quick google search on tax laws for Brazil and Canada indicates that, with regard to Brazil,  if you have a work permit (temporary), or a permanent visa, Brazil considers you a resident immediately.  Residents of Brazil are taxed on their worldwide income, and non-residents are taxed exclusively at source on their Brazilian-sourced income.  It looked like the tax was a flat rate of 25% but I did not read deeply.   If you are in Brazil for reasons other than this, and are there over 183 days (whether or not they are consecutive) during any 12 month span, you are also considered to be a resident from a tax perspective starting on the day after the 183 days are exceeded.    

Source:  https://www.taxesforexpats.com/country_guides/brazil/us-tax-preparation-in-brazil.html

 

With regard to Canada, as a non-resident of Canada, you pay tax on income you receive from sources in Canada. The type of tax you pay and the requirement to file an income tax return depend on the type of income you receive.  Again I did not read deeply but at first glance it looked like this is also a flat rate of 25% unless it falls under a tax treaty specifying a different rate.

Source:  https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/non-residents-canada.html

 

With regard to the Philippines, according to Revenue Regulations No. 1-2011, the wage or income of an OFW that is earned out of the country is exempted from income tax. 

Source:  http://www.ofwguide.com/article_item-1498/BIR-Explains-Tax-Rules-for-OFWs.html

 

I would bet that you'll both end up having a tax obligation to either Canada or Brazil, but you may have a way around it. At least it appears that your wife's wages will be exempt from Philippine income tax so she only has the source country to deal with.  

Good luck, hopefully there actually is a way to avoid taxes.

Addendum:  Out of curiosity, do you have flexibility as to what currency they use to pay you?

 

 

Edited by Chris24
edited for typos
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Goetz1965

You can do as you like but be sure tax offices even read THIS FORUM and sure will go after you now...

Kidding aside, if you are that much into tax savings you should hire a tax agent to handle your things as they have more knowledge in that field like us all together!

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Dafey
1 hour ago, Goetz1965 said:

hire a tax agent to handle your things as they have more knowledge in that field

And can be held accountable if they give you bad info

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A_Simple_Man
5 hours ago, Jimone said:

We are moving to Brazil to work for a Canadian based company in the mining field, and the company is happy to pay my wage into any account.

I know a couple of people who have good luck using a Singapore bank account. 

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Singapore is classified as a tax haven because it offers tax advantages to offshore non-resident companies.

https://www.offshore-protection.com/singapore-offshore-tax-haven

But, as others have said, don't depend on anedotal reports.  This is just a suggestion as a place to start your research.

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Soupeod
8 hours ago, Jimone said:

We will not be citizens of Australia or the Philippines for tax purposes. What will she need to bring to open an account, and does anyone think it will be a problem?

Other than it’s illegal in most countries, US, PH, etc… bad idea, you will need to claim that income and pay taxes. You need an accountant and not a Linc member lol

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Jimone
6 hours ago, Chris24 said:

Addendum:  Out of curiosity, do you have flexibility as to what currency they use to pay you?

Yes, I can choose what ever I want, I will be working directly for the MD in an advisery roll, and being paid out of the companies discretionary fund.

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Davaoeno
2 hours ago, Soupeod said:

Other than it’s illegal in most countries, US, PH, etc… bad idea, you will need to claim that income and pay taxes. You need an accountant and not a Linc member lol

Actually tax avoidance is legal in every country that I know of.  It's only tax evasion that is illegal.  I believe that you can easily achieve what you want and not break any laws 

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cookie47
12 hours ago, Davaoeno said:

tax avoidance

Tax minimisation is the word used in Australia ,and yes quite legal....

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mikewright
On 7/25/2021 at 9:12 AM, Jimone said:

...my wife and I live in Australia... We are moving to Brazil to work for a Canadian based company ...We will not be citizens of Australia or the Philippines for tax purposes...

Thanks in advance for any replies.

Strongly recommend that you get professional tax advice before making any irrevocable decisions.

So many variables, depending on a person's individual circumstances.

As an example of one of the many things to be considered, a person with a main residence in Australia (e.g.,  a house or home unit) could lose their current capital gains tax exemption on that house when becoming a non-resident for tax purposes, potentially resulting in tax of hundreds of thousands of dollars when the property is sold.

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How will Australia’s new legislation on main residence and capital gains tax impact non-residents?

The Australian government passed a legislation on 5 December 2019 that stops a foreign resident (being a non-resident for tax purposes) from enjoying the main residence exemption for capital gains tax (CGT) purposes. This applies to Australian citizens and permanent residents who are non-residents for tax purposes. This article aims to help you understand the significance of the new legislation and prepare for the changes. 

https://www.vistra.com/insights/how-will-australias-new-legislation-main-residence-and-capital-gains-tax-impact-non
 

 

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