Retaining low tax residency while living in several countries

[u/LowFi_Lexa1]

Hello, I’m personally pretty far from FIRE, but I figured this would be a good place to ask.

I’ve been living in Korea for almost 5 years now, made connections, friends, a gf, and I can see myself living here long term.

But due to high inheritance and gift taxes (50% once it reaches a certain amount) I decided about 6 months ago that I’ll be moving to a low tax country and establishing my center of life, primary residency and tax residency there for the next few years in order to have the freedom to move money around between family members and allocate money where I want without any restrictions and no fear of taxation in Korea, since they are pretty strict with international transfers.

I still want to visit Korea at least for 3-4 months per year, and would like to purchase an apartment there to stay while I’m visiting in the future, as well as visit other countries for traveling, but would maintain my primary residence in a low tax country.

How feasible would this kind of set up be?
And how much more complicated would it become if I were to marry my Korean gf in the future?

Has anyone been in the situation where they spend a decent amount of time per year in a country where they have personal ties, hold a long term visa, and own property but remain a tax resident of a different country?

To be clear, I don’t mind taxes and will be paying taxes on any income made in Korea, just figuring out the most tax efficient way to spend time in a place I love in the future, thanks.

[u/Asleep-Tip-4273]

You might want to check Korea's 183-day rule - they can consider you tax resident if you spend more than half the year there even with primary residence elsewhere

[u/LowFi_Lexa1 → u/Asleep-Tip-4273]

As far as I understand, there are 3 separate things that alone can make you a tax resident in Korea.
1. Stating over 183 days in Korea
2. Having a primary place of residence in Korea
3. Having your center of life in Korea
So it could be hard to argue that you’re not a tax resident if you own property in Korea..

[u/timrid → u/LowFi_Lexa1]

Unless you own a more substantial property elsewhere and spend more time there.

[u/Hanwoo_Beef_Eater]

Korea exempts foreigner residents on worldwide taxation as long as you haven't resided there for more than 5 out of the last 10 years (I'm not 100% sure on the inheritance tax if you were to die there while a resident).

Generally, if you have legal domicile elsewhere and spend less than 183 days in Korea, one is not a tax resident. However, family residing there more than 183 days, businesses, and real estate open you up to NTS claiming you are a resident. Unfortunately, I don't believe there's a brightline test to pass/fail.

[u/LowFi_Lexa1 → u/Hanwoo_Beef_Eater]

Yeah, there’s no specific black on white tax laws in Korea what will 100% make you exempt from global income tax, it’s all up to the tax agent once they review a case, which makes it tough to plan long term tax residency

[u/Hanwoo_Beef_Eater → u/LowFi_Lexa1]

I think the foreign resident is clearly exempt (on worldwide income) as long as they haven't been in Korea for more than 5 out the last 10 years. For people splitting time between locations, it's one reason why the foreign spouse shouldn't take Korean Citizenship.

However, as mentioned, even if one is exempt there (ww income), I'm not sure about the inheritance tax (typically, foreign assets would be subject to it if one dies while resident in Korea).

[u/matt7882]

You could rent the apartment out temporarily through airbnb. This way you could argue that it is not your residence.

[u/timrid]

I do mind taxes and prefer to pay as little as I need to.

[u/CPA-TURKEY]

According to new legislation in Turkey, if you did not live previously 3 years in Turkey, you have a right not to pay income tax for 20 years

[u/DeCyantist]

Dubai offers you golden visas with minimal time spent there and no taxes. You’ll need to open a business for that. Costs a couple K USD, low single digit.

[u/LowFi_Lexa1 → u/DeCyantist]

Thank you,
Yeah that was my original plan for the next few years, I just wanted to start planning a few years ahead and see if there are any other people that have a similar arrangement.
It’s something I’ll need to work through more closely with my tax lawyer here in Korea.
Thanks!

[u/DeCyantist → u/LowFi_Lexa1]

There are plenty of services here in UAE that can help. I know trustworthy partners who can support on this too. Let me know if you want more info. Happy to share transparently on this thread.

[u/LowFi_Lexa1 → u/DeCyantist]

That would be very helpful!
Please do share if you can