New´source tax´on exPatriates leaving their country.

[denverd0n]

Originally Posted by ctl411

...just stating that the promised benefits worldwide are probably not going to be kept.

Maybe not, but it is still very bad form to change the rules on people after they have retired, and therefore have no viable way of adjusting their finances. These kinds of changes should be grandfathered in, over time.

I wish you the best of luck, sinbad7, in your attempts to make your government stick to the promises that it has made.

[El Pinguino]

Originally Posted by ctl411

So you lived in a high wage country with all the benefits that come with it. Then you want to go to a low wage place to spend it. This doesn't support at all the people back "home" who are paying your way. Not a economists but don't think that model would work.

If I have earned my money in a high wage country and paid the high taxes associated with that high wage it is my business where I choose to spend my money in my retirement. When I spend my money in less fortunate countries I look at it as a form of direct foreign aid.

That said Australia doesn't seem to screw with your tax but they do gradually shut down your life support systems... after 6 weeks O/S your senior's health benefit card ( cheap pills) is shut down... assorted other bits shut down until after 12 months your family home in Oz ceases to be a home and becomes an asset for pension purposes. I think that was all introduced because too many 'Australians' were going home to Greece and the Lebanon and living the life of Riley after they retired....

[Anders]

Originally Posted by K_V_B

I find this highly unusual. Can you point me to a source corroborating this story?

I am a EU citizen, and have never encountered such a thing (and I've moved countries several tines) In fact, my impression is that the moment you're out of a country that countries tax department couldn't care less for you...

If you still have income in the old country the tax department tends to be very interested, especially if it is pension or real estate.
Where tax should be paid on an income is spelled out in the tax treaty between your old and new country but tax should be paid in one of them most of the time.

[gjordan]

I may be misinformed, but dont we Americans have to pay taxes on our retirement income, no matter where in the world we are? I dont think it is at all unusual for countries to try to get the last drop out of people that they can. _____Grant.

[Pelagic]

There are a number of options available to Ex-pat .US citizens these days.
This one is gaining popularity
WASHINGTON: New tax law driving expats to renounce U.S. citizenship | Congress | McClatchy DC

[Zanshin]

The "source tax" is not one directed at ex-Pats, it means that interest income is deducted at the source and can be claimed back. Thus, if one has income in Germany it is taxed there and deducted automatically before it is paid out. Then one can claim it back if one can prove that it doesn't apply.
Many countries, the USA at the forefront, require citizens worldwide to declare their worldwide income to the local tax authority. I have heard that recent US changes to the filing requirements make it particularly difficult and onerous.
Germany has no such requirement. A check on the Norwegian tax site states

Interests from Norway are not subject to any withholding tax

so perhaps the pension payments are now subject to witholding.

[goboatingnow]

Originally Posted by denverd0n

Maybe not, but it is still very bad form to change the rules on people after they have retired, and therefore have no viable way of adjusting their finances. These kinds of changes should be grandfathered in, over time.

I wish you the best of luck, sinbad7, in your attempts to make your government stick to the promises that it has made.

It may or may not be bad form, but such rule changing is not at all uncommon. Changes in income tax, property taxes , et etc. all effect pensioners.

Dave

[SvenG]

Originally Posted by K_V_B

I am a EU citizen, and have never encountered such a thing (and I've moved countries several tines) In fact, my impression is that the moment you're out of a country that countries tax department couldn't care less for you...

Unless you are a USAian. You will be double taxed on any income outside the US above X unless you renounce your citizenship.


-Sven

[zboss]

Well of course we need to tax more... we have borrowed so much money we have to raise more money to support our current national credit card spending habit and pay off the trillions of dollars or as Bush said "this whole sucker is going down".

Soon we are going to run out of people to tax.

[Nicholson58]

Originally Posted by ctl411

So you lived in a high wage country with all the benefits that come with it. Then you want to go to a low wage place to spend it. This doesn't support at all the people back "home" who are paying your way. Not a economists but don't think that model would work.

You can rest assured Tor paid a pot full as it was earned and all the while he lived in Norway on all of the bennefits HE NO LONGER USES. He no longer uses any of the infrastructure, resources etc. What the heck would be the purpose of dragging down the monthly stipend for which he already paid a compounded tax his entire life? BTW, the nest egg from which he is being paid, theoretically pays a portion less than the interest on the money he paid into the system were he to have the sinking fund in his own hands.

[RedFeather]

This sounds odd. My husband is a Norwegian citizen who has lived in the U.S. for more than a decade. We have never paid Norwegian tax. The Norwegian tax code says you must be a "resident" of Norway to be liable to pay taxes there. This means that if you maintain a residence in Norway, regardless of where you actually spend your time, then you are legally a resident. If you do not maintain a residence in Norway AND you establish a permanent residence somewhere else, your income is not taxable as long as you pay taxes in that country. See Norwegian tax info here. If we've misinterpreted this, we're in trouble.

[K_V_B]

I think that what is going on here is more a closing of a loophole, rather then a country increasing the squeeze on its citizens.
Remember Norway as a country is in quite a good shape financially.

In the country I live in, and I suspect most developed nations, pension contributions are tax deductible. This is done under the expectation that once you draw you pension it is taxed as normal income.

Now when you move to another country when you retire you can usually still receive your pension. How this is done, and how it is taxed is often regulated by special pension treaties between countries.

For example, I live and work in Switzerland at the moment, and am building up a pension here. Once I retire I can move somewhere else. Preferably somewhere with a warmer climate :-)
Now if that place has a pension system similar to that of Switzerland, they will just pay me my pension, and I'll declare it as income, and be taxed, in my country of residence. (If I decide to just cruise my tax residence will probably remain Switzerland)

But you can also take the whole fund with you when you leave Switzerland, in one big lump sum. If you do that however, and take it with you to a place where this is not going to be taxed you have to pay a sort of source tax. Interestingly, this varies in Switzerland from canton to canton, and there exists a pension fund in a low tax canton specifically for the purpose of reducing your tax liability if you expatriate your pension fund...

Maybe something like this is going on here. Norway finds out that some of its retirees have taking their pensions to jurisdictions they are not being taxed, and in this case is withholding a tax at the source on the pension payments. This does look like just the closing of a loophole to me. Annoying of course to those who have been taking advantage of it until now.

[K_V_B]

Originally Posted by SvenG

Unless you are a USAian. You will be double taxed on any income outside the US above X unless you renounce your citizenship.

I know. The US is making life very hard for its citizens abroad. I know of US citizens who have been living here in Switzerland for decades, married locally even, who can't even get a bank account anymore. I know a few who are now indeed trying to get rid of their status as "US persons".

[sinbad7]

K V B

I wish that was the case.. BUT, alas,the tax department of many European countries
are now experiencing HUGE payouts of benefits to millions of emigrants from within the EU as well as refugees from troubled countries and they have to find some way to balance the problem. In Sweden alone,15% of the total population are now of non
ethnic Swedish origin and are using as much as 60% of the welfare budget owing to
language problems resulting in not finding jobs to support themselves.

Whereas,earlier,only a small percentage of their ethnic citizens choose to live in another country for reasons of marriage,health,job or retirement,the total now including people emigrated to their country,has risen dramatically,and a small number
of us ethnic citizens living abroad are made to bear the cost. The idea is also to compensate for the loss of spending in their home country.

I do´nt think the Expat Tax Guide mentioned in an earlier post here,includes details of this new ´source tax`. Expat Tax Guide for Europe | Expatica

Tore

[RedFeather]

Originally Posted by sinbad7

K V B

I wish that was the case.. BUT, alas,the tax department of many European countries
are now experiencing HUGE payouts of benefits to millions of emigrants from within the EU as well as refugees from troubled countries and they have to find some way to balance the problem. In Sweden alone,15% of the total population are now of non
ethnic Swedish origin and are using as much as 60% of the welfare budget owing to
language problems resulting in not finding jobs to support themselves.

Whereas,earlier,only a small percentage of their ethnic citizens choose to live in another country for reasons of marriage,health,job or retirement,the total now including people emigrated to their country,has risen dramatically,and a small number
of us ethnic citizens living abroad are made to bear the cost. The idea is also to compensate for the loss of spending in their home country.

I do´nt think the Expat Tax Guide mentioned in an earlier post here,includes details of this new ´source tax`. Expat Tax Guide for Europe | Expatica

Tore

Wow, too bad all Norwegians can't share the cost of all their citizenry regardless of what color their grandparents are. Shame there's still the need to make distinctions between "ethnic" Norwegians and "immigrant" Norwegians. Why can't you just say that better-off Norwegians are made to bear the cost of less wealthy Norwegians? There are an awful lot of "ethnic" Norwegians on public assistance that no one seems to have a problem with. Scandinivians have no problem with government payouts as long as they go to "ethnic" Scandinavians. Sad.