The fate of Brexit is uncertain, but the rich have taken the lead to fight for their property.
Since last year, due to the convenience of the United Kingdom while in the European Union, a large number of upper-level British people have changed their German and French passports. Most of these people have complicated business relationships in continental Europe. They are worried that once Brexit will affect their company’s business, they can change their European passports early and feel relieved.
Recently, as Brexit has gradually come to an end, another group of rich people have begun to look around the European continent. This time, they are not escaping the trade barriers that are likely to come, but the fearsomely high tax rate.
Rich people are also anxious
Considered by the elites as mad as the current British Prime Minister Boris Johnson, even the former Labour leader Corbin scared the rich in Britain. In order to win the support of British civilians, he proposed a method of revitalizing the United Kingdom by levying more taxes on the 5% of the richest people, developing the state-owned economy, and hiring more unemployed to hedge the viciousness of the Brexit caused by a no-deal Brexit. influences.
This can scare the rich in Britain.
The UK’s national tax rate system is divided into two parts: one is implemented in England, Wales and Northern Ireland; the other is implemented in Scotland. Since most of the rich in the UK are located in England, let’s take a look at the first part of the tax rate.
Like many countries, the United Kingdom implements a cumulative tax system. The annual tax-free income of citizens is 11,850 pounds, and thereafter increases with income. When it exceeds 150,000 pounds, the excess will be levied 45% income tax. This ratio is similar to many countries and regions in the world. For example, China’s progressive tax system has a maximum tax rate of 45%.
Also like most capitalist countries, Britain ’s economic income has already entered a period of high monopoly. The richest 1% of the population contributes 29% of the national income tax. The capital’s London area is also highly monopolised. Of the 4.2 million taxpayers in the city, 87,000 have the highest annual income and contribute half of the city’s tax revenue.
From the perspective of the rich, such a burden makes it really difficult to have feelings for the current tax law.
At the same time, the voices of the British people on the rich and the poor are still very high, and there are strong opinions on the tax evasion, tax avoidance and avoidance of the rich. In the left-wing media, calls for the government to raise taxes on the rich have been rising and falling, and even radical activists have put forward the idea of levying 80% income tax on the rich. This has made the British rich people hesitant and ready to run.
Some people will hand pillows when they go to sleep, and some EU countries are anxious to attract these rich people.
Taxes for the rich
Although Switzerland is not a true EU country, it is also a well-known welfare state, and it is not friendly to the rich on the surface. In fact, Switzerland’s tax laws intentionally left a lot of loopholes to attract rich foreigners to settle in.
There is a well-known “comprehensive tax system” in the Swiss tax system, which is dedicated to serving these foreign rich. When a wealthy foreigner settles in Switzerland, the tax department does not check his personal income worldwide, but only the rent of the house he lives in. Multiplying the annual rent of the house by 5 is all his taxes.
The smart rich will first build a big villa for themselves, then rent a small apartment in Geneva, pay the tax based on the apartment rent, and avoid taxes reasonably.
But this system is only for people who do not have Swiss nationality but who live in Switzerland. They still have to pay the relevant income tax in their home country, and the tax burden has not been reduced much. A permanent solution is to simply emigrate to countries where the tax burden on the rich of the country is also low-some poorer European countries are using this brain.
Portugal is the one that moves fast. As early as 2009, a new tax law was introduced. New immigrants engaged in high value-added industries do not tax their overseas income. They only charge a uniform tax rate of 20% on local income. Given that Portugal is not a very important European country, the big names with businesses all over Europe and the world have very limited income in Portugal, and the tax rate in other parts of the world is 0, which makes Portugal attractive.
Also European countries that are friendly to the rich are Greece and the resort of Malta. Both countries have stated that they will provide preferential tax policies for wealthy foreigners to save their sloppy economies. The economy, which is also in dire straits, also launched a new policy in 2016, which provides uniform preferential tax rates for non-Italian residents.
In these new tax-friendly countries, although their economies are on the verge of collapse and their commercial potential is very limited, as long as they can bring enough economic benefits, it will be difficult for the rich British people who are on the sidelines to wait.
A true rich man’s paradise?
It is not just these typical European poor countries that are working hard to increase their attractiveness to the rich. France, Monaco, and other countries that are economically acceptable are also actively transforming themselves to attract foreign rich.
Thirty years ago, left-wing President Mitterrand first proposed the concept of a wealthy tax, requiring the rich and the poor to unite under the banner of France and fill the gap in the welfare system through high transfer payments. The threshold for this wealthy tax is very low. As long as the net worth of the family exceeds 1.3 million euros, additional taxes will have to be paid.
In the era of the former president, Hollande, the tax rate for rich people in some families was as high as 75%. This also made France replace the fairy tale kingdom Denmark and become the country with the highest tax burden in Europe. Those families who have just reached the line complain that they will return to poverty because of tax overnight, not to mention the wealthier families who have suffered heavy losses due to tax payment.
In these 30 years, the wealthy class in France has been seriously drained. Many rich people have moved from Paris to London to enjoy better financial services in London and lower UK tax rates.
The Macron government has reformed this tax, levying only a wealthy tax on households with a net real estate value of more than 1.3 million euros, reducing the tax rate on capital gains, encouraging rich people to stay in France, and using more hot money Investment in further improving the international competitiveness of French companies.
Surrounded by France, the pocket-rich paradise Monaco’s rich policy is even better.
However, unlike the image of a tax haven in this country, Monaco’s tax exemption scope is only the income of residents in the country. For those wealthy people who are based in Monaco and want to make money through corporate headquarters in other countries, Monaco’s 33% corporate tax is still very high.
The real attraction of Monaco is the high confidentiality of its private banks under the country’s legal system, which can prevent rich people’s home countries from taxing their savings. In addition, Monaco is exempt from inheritance tax, which makes many wealthy people happy to move their families.
The former richest man in the UK, founder of the petrochemical industry leader INEOS, Jim Ratcliffe, moved to Monaco in 2018 and took away two of his wealthy executives.
Ratcliff had the title of Jazz from the Queen of England. However, in order to avoid taxation, it is no longer necessary to honor the British Empire as a taxpayer. It is still important to keep his wallet first.