Growing Online Income

Our Plan to Pay NO TAXES Legally

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I don’t like paying tax… I mean I understand the logistics of it and why you should pay tax, especially if you’re a resident of a country. But as I’ve mentioned a few times on this blog, it is my goal to be location independent with my partner and travel the world and we’re leaving in two months.  I feel like, if we’re traveling the world, paying for our own insurance (comprehensive travel insurance that includes medical coverage) then why should we pay tax while we’re not here?

If I make my target of $20,000 for this month, which is looking a tiny bit unlikely, my month’s tax bill will be around $7,000. That is a pretty big sum of money and if you factor it as an annual figure, it starts to get pretty huge. I would much, much, much prefer to keep that money in the bank and I think I’ve figured out a way this is possible.

When we leave New Zealand, we can apply to be non-tax residents. There’s a form you have to fill it and the criteria is being out of the country for a certain number of days and proving you do not have an enduring relationship with New Zealand. We might run into problems here as we both have student loans. My original plan with my student loan was to pay it back as slowly as possible, but the student loan might be considered an enduring relationship with New Zealand, in which case I’ll be dramatically changing my approach and paying it off as quickly as possible. Bare in mind that around 4-5 months of tax savings would completely wipe my loan for me, so getting it paid off sooner than later is a big help.

The other thing that would be an enduring relationship with New Zealand is my car, which I was thinking about keeping but realistically might be better to sell or to gift to my dad. I’m undecided about that at this stage, but have two months to figure it out.

The final issue I might run into is my bank accounts and the fact I have credit cards in New Zealand. I am sure I have a great credit history, but this is something we’ll have to see.

What I’m Going to do to Pay No Taxes LEGALLY:

1) Apply to be a non-tax resident as soon as I leave the country
They’ll look at my loan, bank accounts and then they’ll make a decision whether I’m a tax resident or not. I’m already planning to open a bank account in another country and will move all my “business” banking to that account

2) Open up a bank account in UAE – a country that does not charge ANY tax on international income.
I have already looked into this and it is possible to open up a bank account with a debit card in Dubai with only a visitor’s visa. I can pick the card up in store, it should take about a week to process, but if I have left before it’s finalised they can post it to me elsewhere in Europe.

3) Spend the longest part of any year in a country that doesn’t charge income tax on international earnings.
As I wont be a resident anywhere, i.e. staying long enough to be a resident or applying for a resident visa rather than just being on a tourist visa, I wont actually be liable for tax anywhere, but I think by spending the largest portion of the year in a country that doesn’t charge tax on international earnings is a smart move, just as a safety net. Places that we are looking at that would be appropriate for this are: Panama, Costa Rica, Guatemala, Malaysia, Singapore, Hong Kong and the UAE.

We were originally looking to move to Panama and set up a LLC there for residency, but I kind of want the “easiest” way to do this. There’s a lot of advantages to us basing ourselves in Asia, as it’s fairly close to New Zealand and very, very cheap. However, I’ve not been to central America and from the photos it does look amazing, so we might just end up happy there anyway. Learning Spanish is a pretty big bonus for us!

The Downsides to being a Non-Tax Resident

Limited Time in NZ
My father’s pretty sick and probably doesn’t have very long left, so I feel a bit conflicted about moving overseas and limiting the amount of time I can spend in the country knowing his health is on the down. There’s also a court case that will be happening some time next year that I would like to be present for. In a 364 day period I only get 39 days in New Zealand – not sure if that’s just for the first year or every year – which is a pretty restrictive, especially considering the circumstances. However, I’m at the age where I need to start thinking about the future too and the opportunity to save both mine and Ben’s tax money is pretty appealing. Realistically we could save $100,000 a year if we both worked hard in tax savings alone. This is a crazy amount of money to me and I know money isn’t everything, but I think my dad knowing I am getting a jump start in life would mean a lot to him.

Paying Back my Student Loan Fast
I didn’t really want to do this, but I think it’s the best shot I have at becoming a non-tax resident and it’s probably best for me in the long term, too.

No Investing in New Zealand
If I bought a rental property in New Zealand, it would probably make me a tax resident as I would be earning an income from the rent and I would have a permanent place of abode here, which is one of the criteria for an enduring relationship with the country. Likewise, I wont be investing in mutual funds as any profits are taxable, once again making me a tax resident. It’s a bit of a shame as this is something I was pretty excited about, but I think in the long run not paying tax will have much better returns.

So hopefully this all works out… this is something I’ll keep you guys updated with as I think it’s going to be a long process. I’m a bit nervous about the logistics of opening up a UAE bank account, but that’s probably only because it’s something new… and different. Hopefully the process goes smoothly and I can stop paying tax very, very soon.

Have you ever considered being location independent so you could pay no tax? Would you like a location independent lifestyle or are you happy staying put? Let me know in the comments below. 

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  • BEST POST EVER!!!!!!!!!!!!!!!!!!!!

    1) This is so fascinating! You’re smart dodging taxes instead of going after mutual funds. Simply because if you make $20k this month and pay $7k in taxes, you’re being taxed at 35%. No way in heck are you gonna be making 35% off your equities each month.

    2) I’m in love with this lifestyle you’re engineering. For myself however, I’m not sure it would be feasible. My family farms thus I will always be a landowner. But I shouldn’t accept defeat. Where’s there’s a will there’s a way. I could probably push some papers around to where I still ultimately control the land but I’m not technically the landowner. Farming has been in our family for generations and would hate to give that up.

    3) Paying your student loan off right away should make you feel even more free. I paid mine off even though I was essentially losing money in the process (I could make better use of the $$$) but the feeling of being debt free really is amazing.

    4) You’ll probably have to close your bank accounts, sell your car (don’t know how you’d insure it), pay off your loan, and close all your NZ credit cards. I would guess.

    5) This is gonna be a series, right? Like you’ll keep us posted on how it’s going? You better. 🙂

    I thought numbers would help since I’m having so many thoughts right now!!! You are literally a few short years away from NEVER worrying about money ever again.


    • Christine says:

      Haha I’m so glad you’re enjoying it 🙂

      1) Thank you. I want to work hard and smart for a few years and then be able to relax and have a lot of financial freedom. I agree, saving our taxes is probably the best financial move we can make and then in a few years we can choose to use our money to make money. We can also look at investing in other countries, such as Hong Kong or something. I’m not in a rush, the first hurdle is getting everything sorted so we can keep our tax money.

      2) You’re American, eh? Well then unfortunately you couldn’t really live this lifestyle! America is a mean country that charges you on international income even if you’re not in the country… if you earn under $94,000 (I think that’s the threshold, it’s something like this) then you can earn that tax-free overseas when you’re not living in America, but above that you have to pay tax. I’m not sure whether the landowning would matter as America ALWAYS considers you a tax resident if you’re above this threshold.

      3) It will be SO weird to be debt-free. Basically as soon as I left the nest, I was in debt and that’s 9 years of having debt! I don’t know how it’ll feel. One thing I’ve been mindful, even though it’s somewhat morbid, is the fact that if I died my loan would be wiped so I kinda felt like there wasn’t so much incentive to pay it off. But even if I can get away with having a student loan and not being a tax resident…. I will be charged interest on it while overseas so it’s a very good idea to smash it away.

      4) NZ doesn’t have compulsory car insurance, so that wouldn’t be an issue, but yeah keeping the car would be a strong tie to NZ. It’s a really nice car (Audi A3) and nicer than my dad’s car so I might gift it to him on the condition I can borrow it when I’m home, haha. I don’t know if I want to sell it.. I will keeping thinking.

      5) Yes of course, I’ll keep you updated with every step of the way… Expect a post in a few months on how to open a bank account in Dubai on a visitor’s visa…. which I actually think might get quite popular! I tried Googling for info and basically found nothing. Thankfully one of the banks there has an online chat, so I asked them directly.

      I am so excited! Will be more excited when we’re legally non-tax residents and I don’t have to split out the money I earn.

      • 2) America… hmmph. So it would either be keep my citizenship but can’t make much overseas or renounce citizenship but lose the land… Thanks for the info at least!

        3) Since you won’t be doing much with your spare cash anyway, definitely use it to smash that debt. You act like it’s a pet or something. 🙂 Time to put Lassey to bed.

        4) NZ is so weird about cars. I’ve heard you guys can license just about anything for road use.

        5) I look forward to it! I wonder what kind of interest you can get over there…

        What an interesting life change this all is for you. Much better than the typical, marriage – 2.5 babies – house in suburbs – trip to Disney – kids lives become far more interesting than your own – grandkids – death. LOL now THAT’S morbid!

  • Pauline says:

    Hi Christine, Panama is a great choice to avoid taxes, however, you should probably talk to a financial advisor specialized in taxes in NZ before you go, to make sure you are doing everything the right way. The few hundreds you will spend are worth it compared to having a late tax bill or penalties down the road. Are you planning on wiping and closing your NZ accounts and taking all the money to UAE? Otherwise isn’t a bank account a relationship to NZ?
    If you move your money you’ll have foreign exchange fees to and back which can add up if the exchange rate goes against you.
    I live in Guatemala and work online, and am happy to exchange if you want to email!

    • Christine says:

      Hi Pauline,

      Thanks so much for your advice. I’ve contacted my accountant about it, and I have recently emailed specialised NZ Tax accountant to get more advice. I totally agree it’s worth investing in to do right. I want to figure out what the bank account threshold is, i.e. whether I can maintain a bank account or two here without problems. I will be definitely coming to you for more advice, Guatemala is a good option for us too.

  • NZ Muse says:

    Fascinating, I’d never considered this aspect of LI! Didn’t even really know it was an option.

    • Christine says:

      It’s proving a little harder than I imagined… it seems no one really knows…. I will keep trying to figure it out 🙂 Thanks for dropping by!

  • […] wrote about their Plan to Pay No Taxes Legally. I hope she keeps us updated because I’m curious how it works out for […]

  • Myles Money says:

    I’ve just discovered your blog and the idea of travelling the world but spending less than 6 months of the year in any one place to avoid tax is very appealing. Who wouldn’t want to avoid paying $7k each month in tax?!

    I would be interested to learn more about how you earn your online income. I know you don’t give details here, but whatever you’re doing is obviously working: $20k of self-generated income each month is a massive success.

    And you’re only in you 20s? Wow!

    • Christine says:

      Hi Miles, great to have you around – hello! Yeah I am still looking into my options regarding tax, especially as my plans have changed dramatically in the past month. I’ll reply to your email 🙂 thanks for your kind words.

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