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Will I totally avoid taxes if I live in a country that does not tax foreign income and having an income in a country that does not tax foreign residents? I was going through http://en.wikipedia.org/wiki/International_taxation and had this idea, and I wonder if I am missing something.

For example, if my income (yet un-taxed, for example income from activities on internet) would be delivered to Germany, but I live in any other country in the world other than US or Eritrea, will I completely avoid taxes?

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It depends on your country of citizenship and country of residence. If your country doesn't tax non-resident citizens then you might be able to avoid taxation under certain conditions. But you should do it with guidance of tax lawyer from your country, tax lawyers in the country where you reside, and tax lawyers in the countries you derive income from.

There are tax havens, and people do move to live there to avoid taxation, but these people don't ask about it on free Internet Q&A forums.

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    @Elchin keep in mind that the tax haven countries may not have income tax, but they do have taxes. While you don't pay income tax living in Bahamas - you pay quite a lot in customs and VAT. kpmg.com/global/en/issuesandinsights/articlespublications/… – littleadv Jul 16 '13 at 7:38
  • About not asking on internet - is it because it is semi-legal/un-ethical? Or is it because of the nature/secrecy of information? I always thought tax havens and people moving there or even renouncing citizenship to avoid taxes is a frequent thing. – Elchin Jul 16 '13 at 7:41
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    @Elchin no, because it is very complicated. Generally, most countries will not allow renouncing citizenship unless you have another citizenship. Germany, IMHO, doesn't allow multiple citizenship. So here's your first problem:-) – littleadv Jul 16 '13 at 7:43
  • Luckily Germany does not tax based on citizenship:) I think only US does that. – Elchin Jul 16 '13 at 8:03
  • @Elchin indeed so. Unfortunately...:-) – littleadv Jul 16 '13 at 8:07

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