Multiple DeGiro accounts for tax efficiency

S

stefanop

Registered User
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59
Hello,

Four years ago I opened a DeGiro account and bought some rollover ETFs using funds from my PAYE income (those ETFs which profit is taxed 41% when sold, or after 8 years). I intend to keep these untouched for the foreseeable future. These ETFs are taxed in Ireland either when I sell the funds or after 8 years as they generate no paid dividends: this is clear, I will also need to declare the profits (if any) to the tax revenue when this happens.

I also opened a second DeGiro account a year later to keep things separate and simple. On this second Degiro account (still funded with money from my PAYE income) I bought a number of blue chip stocks (not ETFs) of companies in Germany , Netherlands, France and Spain all denominated in €€€. I sold them all last week making a profit of roughly 8000€. I want to transfer the 8000€ profits to my N26 card (which is a German bank with German IBAN same as Degiro) and buy a kitchen for my house in Italy, then reinvest the cash left in the account to buy more shares. Since I'm tax resident in Ireland but docmiciled in Italy supposedly I have no tax liabilities in Ireland on this second DeGiro account, this is why I kept them separate. I also received some dividends over the last 3 years (not much to be honest roughly 700€/year ) and did the same thing: transferred them to the N26 card and spent them in Italy and Spain on holidays (I only ever use the N26 card abroad, never use it in Ireland in order not to mix things). I never decalred or paid anything. Is there anything that I need to report to the local Revenue in Ireland on these profits and should have I done anything in the past ?

The accountant in Italy told me that I have no liabilities in Italy as according to the DTA I pay in Italy only the tax on the profits made in Italy (which I do on a few assets that I have rented out). He also told me (3 years ago), not to buy shares of italian companies so I follwed his tip. He said it would be extremely unlikely, especially if we're not talking about large amounts, but someone picky in the Revenue in Italy, may see italian shares as an italian assets, hence ask me to pay the tax in italy for the italian shares.

So is it correct ?

1) For my first Degiro account I decalre and pay all the tax in Ireland (when it's time to sell and if I'm stil in Ireland)
2) for my second Degiro account where I only buy foreign €€€ shares (avoiding irish or italian) and spend the profits only abroad through the N26 card I declare nothing and pay nothing in Ireland (or Italy) on the dividends and profits at sale

Thanks
Stefano
 
Probably too complex for this forum but to me, seems like you are remitting the money to italy so surely you should owe the standard italian tax on your foreign assets (26%). I don't think you have found some loophole where if load money onto N26 in Germany and spend money on holidays in Spain that it results in no tax liability - this is tax evasion.

Talk to a real accountant.
 
Hi R1,

Thanks for the reply, but I don't think you have a good grasp of the topic. Also there are a lot of high caliber and experienced individuals in this forum. My question was really asking whether I need to report something to the Revenue here. Note that this is not tax evasion at all, maybe tax avoidance and I'm just trying to minimize the tax liabilities by taking advantage of my non-domiciled status, like many others. This is a huge advantage. Why do you think this is tax evasion? I indeed spoke with an italian accountant who told me that while resident abroad, in Italy I only have tax liabilities on the income that I generate in Italy (which I already pay in full), this is until I become tax resident in Italy. When I become tax resident in Italy again, I will be assessed on my worldwide income in Italy, but not now. The fact that I'm remitting money earned abroad to Italy or Spain is then not relevant as I'm not tax resident in Italy or Spain.

To put things in prospective: I pay zero €€€ to avail of my non-domiciled status in Ireland. Italy a number of years ago introduced a similar non-domiciled scheme as Ireland. If you are not domiciled in Italy living in Italy, your foreign income will not be taxed in Italy (same as here), if you were born by foreign relatives, you have intention to go back at some stage, you own properties in your country etc. etc. The difference is that in Italy you have to pay 100.000 € a year to avail of your non-domiciled status and avoid being taxed on the income generated outside of Italy. So a handful of individuals can do that. One example was Ronaldo the Juventus footballer who was availing of his non-dom status in Italy. For sure 100.000€ a year for him are peanuts. Here I pay nothing to be considered non domiciled
 
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stefanop said:
I have no tax liabilities in Ireland on this second DeGiro account, this is why I kept them separate. I also received some dividends over the last 3 years (not much to be honest roughly 700€/year ) and did the same thing: transferred them to the N26 card and spent them in Italy and Spain on holidays (I only ever use the N26 card abroad, never use it in Ireland in order not to mix things).
Click to expand...
Sounds like the poor man Double Irish :)
 
r1chd0g said:
Probably too complex for this forum but to me, seems like you are remitting the money to italy so surely you should owe the standard italian tax on your foreign assets (26%). I don't think you have found some loophole where if load money onto N26 in Germany and spend money on holidays in Spain that it results in no tax liability - this is tax evasion.

Talk to a real accountant.
Click to expand...
I am in a similar position to Stefano. My tax advisor in Ireland confirmed that no tax is due if no money is remitted to Ireland from Degiro, as long as there is no investment in Irish stocks or ETF. The only thing he does is adding the total foreign income not remitted to Ireland in my Form 11. It seems that also Stefano's Italian accountant confirmed that no tax is due in Italy, so my question is what tax would be evaded if the person is tax compliant in both countries?

To give more context any person resident and domiciled in Ireland has 1270 Euro gains exempt from CGT, so they are not paying taxes on it. If they use that money abroad, would it be tax evasion in the country where they are having the holiday too?
 
Well it's the same thing if you live and work in Dubai. One of my ex college mates in Italy works in the oil business and lives with the family in Dubai. He's tax resident in Dubai as he spend most part of the year in Dubai, children go to school in Dubai etc.. Same as a lot of Irish people. There is no income tax in Dubai. So because thre is no income tax in Dubai he's compliant locally and because he's not tax resident in Italy he doesn't have to pay a cent to the italian tax system on the Dubai income. This doesn't make him a tax dodger. Same for the irish people there. No tax needs to be paid in Ireland on the Dubai income if they are tax resident in Dubai, it's all clean tax free. There is no tax evasion.
 
stefanop said:
Hello,

Four years ago I opened a DeGiro account and bought some rollover ETFs using funds from my PAYE income (those ETFs which profit is taxed 41% when sold, or after 8 years). I intend to keep these untouched for the foreseeable future. These ETFs are taxed in Ireland either when I sell the funds or after 8 years as they generate no paid dividends: this is clear, I will also need to declare the profits (if any) to the tax revenue when this happens.

I also opened a second DeGiro account a year later to keep things separate and simple. On this second Degiro account (still funded with money from my PAYE income) I bought a number of blue chip stocks (not ETFs) of companies in Germany , Netherlands, France and Spain all denominated in €€€. I sold them all last week making a profit of roughly 8000€. I want to transfer the 8000€ profits to my N26 card (which is a German bank with German IBAN same as Degiro) and buy a kitchen for my house in Italy, then reinvest the cash left in the account to buy more shares. Since I'm tax resident in Ireland but docmiciled in Italy supposedly I have no tax liabilities in Ireland on this second DeGiro account, this is why I kept them separate. I also received some dividends over the last 3 years (not much to be honest roughly 700€/year ) and did the same thing: transferred them to the N26 card and spent them in Italy and Spain on holidays (I only ever use the N26 card abroad, never use it in Ireland in order not to mix things). I never decalred or paid anything. Is there anything that I need to report to the local Revenue in Ireland on these profits and should have I done anything in the past ?

The accountant in Italy told me that I have no liabilities in Italy as according to the DTA I pay in Italy only the tax on the profits made in Italy (which I do on a few assets that I have rented out). He also told me (3 years ago), not to buy shares of italian companies so I follwed his tip. He said it would be extremely unlikely, especially if we're not talking about large amounts, but someone picky in the Revenue in Italy, may see italian shares as an italian assets, hence ask me to pay the tax in italy for the italian shares.

So is it correct ?

1) For my first Degiro account I decalre and pay all the tax in Ireland (when it's time to sell and if I'm stil in Ireland)
2) for my second Degiro account where I only buy foreign €€€ shares (avoiding irish or italian) and spend the profits only abroad through the N26 card I declare nothing and pay nothing in Ireland (or Italy) on the dividends and profits at sale

Thanks
Stefano
Click to expand...
Does it not depend on whether DeGiro is considered offshore or not? i.e. did you use your irish address to set up the account?

I am not an expert, but that might change things? The other point is why would you need to pay the 8yr tax on ETFs if you held them offshore and didn't remit the money back into ireland?
 
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