Remittance Basis
Reviewed by A method of taxation under which a non-domiciled resident is taxed on foreign income only to the extent it is brought into the country of residence.
The remittance basis is a method of taxation applied in certain jurisdictions to residents who are not domiciled there. Under it, foreign income and gains are taxed only when they are brought (remitted) into the country of residence; amounts kept abroad are generally not taxed locally until remitted.
This regime is often of interest to wealthy individuals with substantial foreign income who become resident in a country that offers it. It is usually linked to non-domiciled status and, in some countries, to an annual charge, and it interacts with double taxation treaties and other rules.
The remittance basis exists only in a limited number of jurisdictions, and its availability, conditions, and any annual charges vary and may change over time, so professional advice is essential before relying on it.
FAQ
What actually counts as remitting income into the country?
Usually more than a bank transfer: card spending inside the country, buying local assets and settling local liabilities out of foreign funds can all qualify as a remittance. The definition tends to be broad and is set by the legislation of the jurisdiction concerned.
If income stays offshore, does it still have to be reported?
Relief from tax is not relief from reporting: claiming the regime is normally itself a filing position, and disclosure duties for foreign income, accounts and structures vary by country. Reporting is best planned with a tax adviser in that jurisdiction.
Does the regime last indefinitely?
Usually not. Where it exists it is typically time-limited and may carry an annual charge, and the conditions are revisited from time to time — they should be checked against the current version of the law.
Does an investment residence permit come with this regime automatically?
No. Immigration status and tax status are separate: the program grants the right to reside, while a special tax regime applies on its own criteria and normally has to be claimed.
Does the regime hide foreign assets from tax authorities?
No. Automatic exchange of financial information operates regardless of the regime chosen; the regime affects which income is taxed in the country of residence, not the visibility of accounts and structures.