Anonymous ATM Cards
Almost anyone who has told me that they are considering moving some money into an offshore bank account has outlined the following scenario for me:
A super secret offshore bank account, sitting in a tax haven offshore, cranking out tasty gains in the forex or offshore markets through an anonymous investment accounts while you conveniently, anonymously, and without adverse tax consequences, withdraw your money as you need it back in your own heavily taxed, first-world hometown through an ATM card.
Sounds good doesn’t it?
Well, unfortunately, if it were only that simple, no one, but no one would pay any taxes whatsoever, and the motivation to do any domestic banking whatsoever would be for only the smallest and most trivial of transactions.
That said, however, depending on your citizenship, country of residence, and the amount of work and research your willing to do, some or all of the above dream situation can be yours.
Before I get into this discussion, I should point out that I am in no way qualified to advise on *any* tax matters in any jurisdiction, and you’ll obviously be required to verify anything you read here with a competent *local* expert before acting on any of this. Ok, that out of the way, let me explain some of the issues/roadblocks that are likely keeping you from realizing your offshore banking dream.
First and foremost, you have to be aware that US citizens are liable for taxation on WORLDWIDE income…regardless of your country of residence even. For instance, even if you have been an expat for a dozen years and not set foot on american soil the entire time, each april 15, Uncle Sam demands his pound of flesh.
While there is a tax exemption on the first $80k/annum, this is only on “earned income” and really amounts to a tax break for corporations in their quest to place executives overseas….in other words it’s a nice “bennie” if you can explain to them that the first 80k is tax free.
If however, on the other hand you expect to secure your living from investing your own funds, you’ll need to be a little more creative to be totally above board and in compliance with IRS regulations.
This in the past could have involved forming offshore asset protection trusts, but nowadays it typically involves the setup of a more complex offshore asset protection structure and at least one offshore company formation.
Even once all of these pieces are in place, the tax authorities have become “wise” to the game of using bank and ATM cards to withdraw and repatriate money that is currently residing offshore, often in undeclared bank accounts.
If you are not planning on moving offshore yourself and will continue to reside in the high tax jursdiction while extracting offshore money from atms, bank cards, or an offshore credit card, most offshore service providers recommend “just “don’t do it”.
However, if you are dead set against ignoring this piece of advice there are a couple of things you want to be looking for:
First and foremost, if you are going to get a card with any name on it, make sure it is in the name of an offshore company at least. Better, if it is in the name of an offshore company in a jurisdiction with very strong secrecy laws, and/or bearer shares.
Better yet, is an anonymous bank card. This is a card that doesn’t carry an embossed name on it. There will be restrictions where you can use such a card, and they are a bit rare and difficult to find, but it is the safest.
Secondly, there are some well known cases in the offshore banking world where individuals ignored the advice of their offshore service providers and went ahead with using their “anonymous” bank cards while still living “onshore”. Unfortunately, these souls didn’t think to take the next step and avoid automatic teller machines (ATMs) with cameras attached.
The few ATMs which DON’T have cameras attached are generally the higher cost “bank machines” that are not affiliated with a particular bank that you see standalone in minimarts, truck stops, etc. While many of the said locations have their own camera facilities installed, the bank doesn’t have direct access to it and a record of your picture is not stored with every tranaction like the atm cameras.
Regardless of what you decide to do, making your own decisions on what to do to legally reduce your tax liabilities is a little like doing your own brain surgery. It’s always a better idea to seek out the advice of able, qualified experts — especially if you live in a jursidiction (like the US) which has criminalized the offense of tax evasion.