Is it possible not to pay taxes anywhere?

Nowadays there is a growing interest in the possibility to avoid paying taxes when moving to other countries. Various states try to attract rich and successful people by offering favourable tax conditions, sometimes even complete exemption from tax obligations. A study by the German Max Planck Institute for Tax Law and Public Finance addresses the question of whether it is possible to completely avoid paying taxes in the country of origin or the country of new residence.

This article is based on facts and does not resort to political manipulation. It analyses in detail the legal, factual and moral aspects of paying or not paying taxes. Those who are not prepared to read the entire 30-page monograph can familiarise themselves with the main conclusions:

• Does the legal obligation to pay taxes exist anywhere? – No, there are an increasing number of situations where mobile citizens do not pay taxes in either their country of origin or their country of residence. This is due to changing approaches to international taxation: countries are reducing tax rates to attract investment and promising individuals.
• Is the actual obligation to pay taxes anywhere? – Yes, virtually everyone pays some taxes anyway. Exemption from direct taxes does not mean complete freedom from the economic consequences of taxation, because other taxpayers shift their tax burden to tax-exempt citizens every time they consume or earn income.
• Is the moral obligation to pay taxes anywhere present? – Again, no. At the global level, there is no mechanism for financing global goods or worldwide redistribution that requires the participation of all people on the planet. Taxation exists only at the level of individual nations, and if neither the country of origin nor the country of residence applies its taxing rights to a particular group of people, those individuals have no obligation to compensate for or reject the political choices made by the country and its governing bodies.

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