Changing Tax Residency – Professional Legal Counsel

 

Changing tax residency can be an entirely legal and justified decision. A hundred and forty-two thousand millionaires do it successfully each year. But such a change demands authenticity—a genuine relocation of life, not merely an address update in official documents. It requires commitment—minimizing ties to the old country, establishing roots in the new one. And it requires honesty, both with tax authorities and with oneself.

Every credit-card transaction at a Warsaw restaurant. Every Instagram post. Every login to the corporate network revealing a Polish I.P. address. Every prescription filled at a Polish pharmacy. Every passage through an e-TOLL gate. Every phone call pinging off a Polish cell tower. These traces don’t lie, and they cannot be erased.

If you’re contemplating a change in tax residency, think of it as a fundamental decision about where you want to live, raise children, build a future. If the answer is “in Dubai,” then truly move to Dubai. If the answer is “in Poland, but I’d like to pay less in taxes,” that’s not a change of residency—that’s wishful thinking. And wishful thinking in tax matters ends badly, as Becker, Messi, Ronaldo, Shakira, and dozens of others have discovered.

 

 

Changing Tax Residency—The Most Attractive Destinations for Poles

 

From a Polish perspective, the most attractive tax residencies are Malta, Cyprus, Dubai, and Monaco.

Why? Because for Polish entrepreneurs, the difference in tax rates is substantial, whether on the flat-rate system or the progressive tax scale in Poland. The owner of a thriving company faces an effective rate of 34.39 per cent when paying dividends. Meanwhile, in Dubai, Malta, or Monaco—potentially zero per cent.

 

Leading Destinations:

 

Dubai (U.A.E.) Tax Residency

0% personal income tax
Challenge: the 1993 Polish-Emirati treaty requires citizenship
Requirement: 90-183 days of physical presence + economic substance

 

Malta Tax Residency

Non-dom regime: taxation only on income remitted to Malta
E.U. stability, English language
Requirement: minimum 90 days annually

 

Cyprus Tax Residency

60 days annually + non-dom status
No tax on dividends and capital gains
Cultural proximity, English language

 

Monaco Tax Residency

0% income tax
Prestige, security, quality of life
Requirement: actual residence, very high costs

 

 

Other destinations: Switzerland (lump-sum taxation), Portugal (N.H.R. regime), Italy (flat tax of 100K euros), Saudi Arabia (Vision 2030)

But between the dream of lower taxes and a legal, secure residency change lies a long road full of legal traps that can cost more than the potential savings.

 

 

Changing Residency in the Era of Digital Verification

 

The World Has Changed—Verification Methods Too

Twenty years ago, Boris Becker lost his case for tax avoidance because he kept keys to a Munich apartment. Today, such a “minor oversight” is archaeological—yet it illustrates a fundamental truth: actions speak louder than declarations.

You can have the best lawyers, the most carefully prepared documents, residency certificates from Monaco, but if you maintain even minimal ties to a high-tax country, you can lose everything. And in the smartphone era, with G.P.S., payment cards, and social media, every moment of life leaves a digital trace that cannot be erased.

What Tax Authorities Verify:

• Every card transaction in the country of origin
• Social-media posts with geolocation
• Corporate network logins (I.P. addresses)
• Pharmacy prescription fulfillments
• Toll-gate passages (e-TOLL)
• Phone calls through local cell towers
• Visits to doctors, hairdressers, fitness clubs
• Utility bills for electricity, Internet, phone
• Testimony from neighbors, colleagues, business partners

Shakira learned this in 2023, when Spanish authorities interviewed her neighbors, checked her hairdresser visits, and analyzed Instagram posts, proving she spent more than two hundred days annually in Spain despite declaring residency in the Bahamas. The settlement cost her 7.3 million euros.

 

Polish Tax-Residency Criteria

 

Two Criteria from Article 3 of the PIT Act—Simple in Theory, Complex in Practice

 

For Polish tax residents considering a change, the law offers seemingly simple criteria. Article 3 of the Personal Income Tax Act (P.I.T.) states that individuals are subject to unlimited tax liability in Poland if they have a place of residence in the territory of the Republic of Poland. A person is considered to have a place of residence if, first, they possess in Polish territory a center of personal or economic interests (center of vital interests), or, second, they remain in Polish territory for more than 183 days in the tax year.

The center of vital interests is a legal construct that sounds enigmatic but in practice is brutally concrete. Tax authorities examine the entirety of life.

You are a Polish tax resident if you meet either of two criteria:

1. Center of Vital Interests Is in Poland (Center of Personal or Economic Interests)

Tax authorities assess the totality of life:

• Where is your family (spouse, children)?
• Where are your real estate, bank accounts, investment portfolios?
• Where do you conduct business, manage companies?
• Where is your doctor, dentist, mechanic?
• Where are you a member of clubs, associations?
• Where do you spend weekends, vacations?
• Where do you pay for utilities, services?

2. Physical Presence in Poland Exceeds 183 Days in the Tax Year

A simple quantitative criterion—but the devil lurks in documentation details.

 

 

Exit Tax—The Hidden Cost of Changing Residency

 

Changing residency not only opens doors (no taxation in the new country) but can also close them (the necessity of paying exit tax in Poland).

Exit tax applies to:

• Persons who have been Polish residents for at least 5 of the last 10 years
• Holding shares in companies valued above a specified threshold
• Taxation of unrealized capital gains at the moment of losing residency

Example:

• You founded a company 10 years ago, investing 100,000 złoty
• Today it’s worth 5,000,000 złoty
• Exit tax: 19% of 4,900,000 złoty = 931,000 złoty
• You pay BEFORE selling shares or receiving any benefit

For entrepreneurs with substantial share packages, this can mean hundreds of thousands, sometimes millions, of złoty.

 

Positive Consequences

 

New Structuring Opportunities

 

After a lawful change of residency, Polish regulations on controlled foreign companies do not apply, opening possibilities for:

• Offshore companies in classic tax havens
• Cyprus company with 12.5% C.I.T.
• Malta company with effective 5% C.I.T.
• Dubai company with potential 0% (Q.F.Z.P. status)
• Monaco company with 0% for most activities

 

The Global Battle for Capital

 

The United Kingdom leads in the exodus of wealthy foreigners, losing 16,500 millionaires in 2025—more than double the number in 2024. The media christened this phenomenon “Wexit”—wealth exit. The closure of the Tier 1 Investor Visa program in 2022 was the first signal. The abolition of the non-dom system in March, 2024, was the second. The October, 2024, budget, which raised taxes on capital gains and inheritances, was the third and final blow. Britons are filing a hundred and eighty-three per cent more applications for alternative residency programs and citizenship by investment than a year ago. Where are they going? To the U.A.E., the U.S., Italy, Switzerland.

China is losing 7,800 millionaires, though the trend is stabilizing thanks to the development of technology ecosystems in Shenzhen and Hangzhou. India is losing 3,500, but some are returning from the U.K., drawn by new opportunities in Mumbai and Bangalore. South Korea is experiencing a dramatic increase in outflow—2,400 millionaires in 2025, six times more than three years ago. Experts blame the world’s highest inheritance and gift-tax rates. Young Korean millionaires are simply packing up and leaving. France is losing 800, Spain 500, Germany 400.

Norway is a separate story, a case study in how NOT to reform a tax system. When the government raised the wealth tax to 1.1 per cent in 2022, approximately five thousand millionaires moved to Switzerland. The policy was supposed to generate a hundred and forty-six million dollars in additional revenue. Instead, it triggered a capital outflow costing five hundred and ninety-four million dollars in lost tax revenue—four times more than the anticipated gain. The problem with Norway’s wealth tax is mathematically brutal: at 1.1 per cent annually on wealth and thirty-eight per cent on capital gains, you must sell significantly more assets than the tax itself to cover both levies. Effectively, you lose about one-fiftieth of your wealth every year. For someone with fifty million dollars in assets, that’s a million dollars annually. Over ten years—ten million. No wonder they left.

But there’s another side to this story—countries winning this global game for capital. The United Arab Emirates will receive 9,800 millionaires in 2025, more than any other country. Dubai officially ranks first among cities globally, welcoming more than 7,100 millionaires and over 200 centi-millionaires with net worth exceeding a hundred million dollars. Saudi Arabia is the fastest-growing destination—2,400 millionaires in 2025, a seven-hundred-per-cent increase from the previous year. The ambitious Vision 2030 program, megaprojects like N.E.O.M. and the Red Sea Project, the Saudi Green Card offering permanent residency without sponsors—it’s all working.

The United States will receive 7,500 millionaires. Despite internal political tensions, America continues to attract capital through the scale of investment opportunities and institutional stability. Europe has its winners: Italy will receive 3,600, Switzerland 3,000, Portugal 1,400, Greece 1,200. Singapore 1,600. Canada and Australia about a thousand each.

From a Polish perspective, however, the most attractive remain: Malta tax residency, Cyprus tax residency, Dubai tax residency, and Monaco tax residency.

 

 

How NOT to Change Tax Residency—Case Studies

 

When Keys Speak Louder Than Declarations: Boris Becker and the Lesson of Authenticity

 

The stories of wealthy people battling tax authorities aren’t merely celebrity gossip. They’re case studies showing how tax-residency verification actually works. And few cases are as instructive as Boris Becker’s story.

In the nineteen-eighties and early nineties, Becker was at the top of the tennis world, earning a fortune. He officially claimed his primary residence was Monaco, a tax haven, and that he visited Munich only occasionally. German tax authorities conducted an investigation from 1996 to 2002. And they found something that seemed trivial: Becker kept keys to a Munich apartment.

The apartment belonged to his sister, his parents paid the rent, Becker didn’t stay there longer than 183 days a year. Everything formally in order. But he had keys. This detail proved decisive. The tax office concluded that since Becker kept keys, his primary place of residence wasn’t clearly and exclusively on the Mediterranean. He maintained access to German property, had the ability to use it at any moment, so he effectively lived there.

In October, 2002, Becker was convicted of tax evasion for the years 1991-1993, avoiding approximately 1.7 million euros in taxes. Despite paying three million dollars in back taxes and interest before trial, prosecutors demanded three and a half years in prison. Judge Huberta Knoeringer ultimately gave him a suspended sentence of two years and a fine of 500,000 euros, sparing him from German prison. The verdict also meant a ban on running German companies, as he was deemed untrustworthy.

This case teaches something fundamental: actions speak louder than declarations. You can have the best lawyers, the most carefully prepared documents, residency certificates from Monaco, but if you maintain even minimal ties to a high-tax country—such as possessing keys to a family property—you can lose everything.

 

Michael Schumacher and Swiss “Foreigner Without Income”

 

When Michael Schumacher moved from Germany to Switzerland in 1996, he was fleeing a forty-two-per-cent income tax, a fifty-three-per-cent investment tax, and a five-per-cent solidarity levy for rebuilding eastern Germany. The Swiss government classified Schumacher as a “foreigner without income,” taxing him on expenditures, not income. This special arrangement was available to prominent foreigners.

Based on housing costs, Schumacher paid approximately $980,000 annually in Swiss taxes. That’s a fraction of what his estimated annual income of thirty to seventy million dollars would have generated under the German tax system. The arrangement became politically controversial. Swiss Social Democrat Suzanne Oberholzer launched the “Schumi Initiative,” attempting to force parliament to establish higher income-tax rates for wealthy expats.

In 2012, Schumacher himself protested against proposed Swiss tax increases, threatening to leave if lump-sum taxes were raised. In 2003, when Germany was struggling with falling tax revenues and spending cuts, even Finance Minister Hans Eichel publicly criticized Schumacher and other sports heroes like Franz Beckenbauer for their “unpatriotic” tax exodus.

Schumacher’s story reveals the political dimension of changing residency. When you’re a public figure, your decision about tax relocation becomes a national issue. The media and politicians will accuse you of lacking patriotism. Society will judge you. And governments may change regulations precisely to make your life difficult.

 

Shakira and the Question of 183 Days

 

Colombian pop star Shakira faced Spanish fraud charges focusing on where she actually lived between 2012 and 2014. Prosecutors claimed she spent more than 183 days annually in Spain (automatically establishing tax residency) while officially declaring residency in the Bahamas, avoiding approximately 14.5 million euros in taxes.

Spanish authorities built their case methodically: they interviewed Shakira’s neighbors, checked her social-media posts, verified payments at hairdressers, and reviewed health-clinic documentation during her pregnancy. According to prosecutors, Shakira lived in Spain with her then boyfriend, Barcelona footballer Gerard Piqué, spending more than two hundred days annually in the country from 2012 to 2014.

Shakira maintained that she led a “nomadic lifestyle” due to international concert tours and judging duties on “The Voice” in the U.S., moving permanently to Barcelona only before her second son’s birth in January, 2015. She officially declared Spain as her tax residence in 2015 and had already paid 17.2 million euros in taxes.

On the trial’s opening day in November, 2023, Shakira reached a last-minute settlement, accepting a three-year suspended sentence and fines of 7.3 million euros to avoid up to eight years in prison. In her statement, she said she resolved the matter “with the best interests of my children in mind” and to “move past the stress and emotional burden.”

The case demonstrates that tax authorities increasingly use digital traces, service-provider documentation, and witness testimony to establish actual physical presence, making it harder to maintain fictitious residency claims. Instagram posts, hairdresser visits, clinic records—all become evidence. In the digital age, you can’t pretend you’re not somewhere when your phone, payment cards, and social media say otherwise.

 

 

Gérard Depardieu: When Patriotism Meets the Pocketbook

 

French actor Gérard Depardieu’s tax exile in 2012 became a major political scandal in France. When President François Hollande introduced plans to tax high incomes at seventy-five per cent, Depardieu registered as a resident of Néchin, Belgium—just eight hundred metres from the French border.

French Prime Minister Jean-Marc Ayrault criticized the move as “shabby,” “pathetic,” and suggested Depardieu was “shirking his patriotic duties.” Depardieu responded forcefully in an open letter: “I’m leaving because you believe that success, creativity, talent, anything different must be punished.” He claimed that seventy per cent of his earnings went to taxes after nearly fifty years of work.

In February, 2025, French prosecutors opened an investigation into qualified tax evasion and money laundering regarding Depardieu’s Belgian tax residency, aiming to determine whether he actually lived in Néchin or spent longer periods in France than his status allowed.

In a surprising twist, Russian President Vladimir Putin offered Depardieu Russian citizenship in December, 2012, which the actor accepted. Putin personally handed Depardieu a Russian passport in Sochi in January, 2013. Depardieu received preferential tax treatment in Russia at a six-per-cent rate—half the rate for most fiscal residents.

 

Johnny Hallyday: Where Is the Legend’s Home?

 

It’s worth remembering that changing residency can also affect inheritance laws, as we discuss in a separate article “Changing Tax Residency and Inheritance Matters.” This is significant because inheritance and forced-heirship rules vary widely around the world (“Forced Share and Compulsory Share in World Legal Systems—A Comparative Analysis in the Context of International Estate Planning“).

Johnny Hallyday was a figure whose significance for France is hard to overstate. For more than half a century, he was the uncrowned king of French rock, an artist who filled stadiums and sold more than a hundred million records. For the French, he was what Elvis Presley was for Americans—a national icon, a generational symbol, a living legend. When he died in December, 2017, Paris stood still. His funeral on the Champs-Élysées drew nearly a million people.

But Hallyday’s death triggered not only national mourning but also one of the most publicized inheritance disputes in recent years. In 2014, three years before his death, Hallyday drafted a will in California leaving his entire estate—estimated at hundreds of millions of euros—to his fourth wife, Laeticia, and their two adopted daughters. His two older children from previous relationships, David and Laura, were completely omitted.

Hallyday moved to Switzerland in 2007 to escape French taxes, telling Paris Match: “I’m tired of paying taxes… After nearly fifty years of hard work, my family deserves to live in peace. Yet seventy per cent of my earnings go to taxes.” He later established domicile in California for tax purposes.

The older children challenged the will based on French forced-heirship rules (réserve héréditaire), which prevent disinheriting children. The key question was: was Hallyday “habitually resident” in France or the U.S. at the time of his death in December, 2017?

In May, 2019, the Nanterre court ruled that Hallyday was indeed “habitually resident” in France despite his “wandering and gypsy lifestyle,” U.S. properties, and California domicile. The court heavily weighed the fact that Hallyday remained a French icon, performing concerts at major French venues until the end of his life, attended by a “respectable French audience.” His son David presented Instagram evidence showing Hallyday spent a hundred and fifty-one days in France in 2015 and a hundred and sixty-eight days in 2016.

This interpretation of the E.U. succession regulation meant that French law applied to Hallyday’s worldwide assets, requiring 18.75-per-cent “reserved shares” for each of his four children. The case illustrates how cultural identity and public perception can influence residency determinations, even for people with formal legal residence elsewhere. For French tax authorities, Hallyday was too French to be American—he sang in French, for the French, in France. Where he slept didn’t matter.