Correct setup for cryptotrader?

[Konstanz]

Just moving to another country for 183 days, withdraw a profits which would be taxable in a Spain in case of not doing it, and comming back next year is considered by spanish tax authorities as abuse of law.
And you will be liable for income tax as well as all penalties and criminal prosecution in Spain.

Do not believe to people who are trying to sell you just a dream about moving to UAS for some time, cash out your cryptos and move back to Spain afterwords. This is not how it works. One day, when you will be crying in a jail for a tax fraud, they will just declare, everything is your responsibility.

To cash out a crypto, you need more sophisticated structure. It is not cheap nor easy, But is it still possible. Do not believe those who promise you easy and cheap solutions. Expecialy if you are resident of high tax western country, what Spain is. They are just trying to sell you their services and they do not care about you in real.

Just moving to Dubai for 6 months, botain tax residence certificate, cash out crypto and come back to Spain, will be conssidered by spanish tax authority as abuse of law and they will deny to accept your UAS tax residence certificate as result of abuse of law and you will be taxed from all income + penalties + late tax payment interest + criminal prosecution..

It's true. I had tax investigation myself. I am tax expat. I can confirm that if amounts are larger barely having tax certificate would not be enough. They will ask for lots of proof you really moved outside the country: airlines tickets, rental agreements, utility bills, residency certificate and all other proofs like (membership at clubs, newspaper memberships, doctor visits confirmations). I still had my apartment in my home country, so they asked neighbors if I was really not in the country etc. They do everything they can to prove I am still resident in my home country. Even though I have spent only 2 weeks a year on Holiday in my home country...
You really must have lots of substance in UAE to be a real tax resident there and not be tax resident in home country.

 

[DavidS]

Do not believe to people who are trying to sell you just a dream about moving to UAS for some time, cash out your cryptos and move back to Spain afterwords. This is not how it works. One day, when you will be crying in a jail for a tax fraud, they will just declare, everything is your responsibility.

Can't he avoid penalties in Spain if he keeps all assets under the company and not under his individual name and account?

So yes, he will move back, yes, he will have cashed out under UAE company, BUT the assets will be held UNDER COMPANIES NAME.

Wouldn't that make it less likely to get into sh**?

 

[Konstanz]

Can't he avoid penalties in Spain if he keeps all assets under the company and not under his individual name and account?

So yes, he will move back, yes, he will have cashed out under UAE company, BUT the assets will be held UNDER COMPANIES NAME.

Wouldn't that make it less likely to get into sh**?

It's difficult to say. I have left my small apartment to my relatives. So, tax authorities tried to prove I still own that apartment. If it's under YOUR company name or some relative or related person, they can say you still owe it. But the most important part is that you do not stay physically in your country, so then even if you have some assets in your countries they cannot prove that your HOME is there. You have to have HOME in other country.

What I am trying to say, that these promotions of Emirati ID and tax certificate sounds nice, but in reality, it will not be enough to claim tax non-resident in serious European countries like Spain, France, Italy.

 

[FreeBit]

It's difficult to say. I have left my small apartment to my relatives. So, tax authorities tried to prove I still own that apartment. If it's under YOUR company name or some relative or related person, they can say you still owe it. But the most important part is that you do not stay physically in your country, so then even if you have some assets in your countries they cannot prove that your HOME is there. You have to have HOME in other country.

What I am trying to say, that these promotions of Emirati ID and tax certificate sounds nice, but in reality, it will not be enough to claim tax non-resident in serious European countries like Spain, France, Italy.

Then what country/setup would you suggest?I am really considering getting the non dom residency in Cyprus, what do you think? Thank you in advance!

 

[JackAlabama]

Then what country/setup would you suggest?I am really considering getting the non dom residency in Cyprus, what do you think? Thank you in advance!

Simply leave eu and stay elsewhere for real. Who wants to stay in these rolling lockdown anyway.

 

[nomad999]

make sure to not keep any tie to your home country, no apartment, no bank account and nothing of value.
after that it's much harder for them to abuse their laws if you have proper documentation about residence certificate and such.

 

[FreeBit]

Simply leave eu and stay elsewhere for real. Who wants to stay in these rolling lockdown anyway.

where?

 

[FreeBit]

make sure to not keep any tie to your home country, no apartment, no bank account and nothing of value.
after that it's much harder for them to abuse their laws if you have proper documentation about residence certificate and such.

that's what i was thinking to do. With the exception of bank account. Do you think that is the final step? Any personal experience supporting this final step?

 

[FreeBit]

Just moving to another country for 183 days, withdraw a profits which would be taxable in a Spain in case of not doing it, and comming back next year is considered by spanish tax authorities as abuse of law.
And you will be liable for income tax as well as all penalties and criminal prosecution in Spain.

Do not believe to people who are trying to sell you just a dream about moving to UAS for some time, cash out your cryptos and move back to Spain afterwords. This is not how it works. One day, when you will be crying in a jail for a tax fraud, they will just declare, everything is your responsibility.

To cash out a crypto, you need more sophisticated structure. It is not cheap nor easy, But is it still possible. Do not believe those who promise you easy and cheap solutions. Expecialy if you are resident of high tax western country, what Spain is. They are just trying to sell you their services and they do not care about you in real.

Just moving to Dubai for 6 months, botain tax residence certificate, cash out crypto and come back to Spain, will be conssidered by spanish tax authority as abuse of law and they will deny to accept your UAS tax residence certificate as result of abuse of law and you will be taxed from all income + penalties + late tax payment interest + criminal prosecution..

What would be an adviseble setup and exit strategy?
Staying in cyprus for 5 years only visiting Spain for 15 days per year? (and staying in cyprus for at least 200 days per year?)

 

[nomad999]

that's what i was thinking to do. With the exception of bank account. Do you think that is the final step? Any personal experience supporting this final step?

yes extremely important I believe if you are from EUSSR, otherwise they could argue this bank account is your center of of vital interests or something like that.

for example, most developped countries are doing this now :
https://www2.deloitte.com/content/dam/Deloitte/ru/Documents/tax/ProsperoScope/English/25-11-2019.pdf

If an individual qualifies for tax residency in two states at the same time, to determine his tax residence under the DTT, the following criteria should be consistently applied:
1) location of the permanent place of abode
2) location of the centre of vital interests
3) place of habitual residence
4) citizenship.
If these criteria are not sufficient, the competent authorities of the countries will settle the issue by agreement.

The practice of applying these provisions is currently limited; internationally, the focus is being made on analysing all circumstances in aggregate.
The greatest disputes arise around the centre of vital interests, since in most countries this concept is subjective and has no clearly established criteria.
The centre of vital interest test includes establishing the family location, social ties, positions held, participation in political and cultural events, places of business and management of family assets. Together with other circumstances, retaining any of the above in a particular country may evidence that the centre of vital interests has not been moved abroad.
If the concept is formalised in the Russian Tax Code without clear criteria, it may take years for the relevant regulatory practice to develop.

 

[Almouk]

Just moving to another country for 183 days, withdraw a profits which would be taxable in a Spain in case of not doing it, and comming back next year is considered by spanish tax authorities as abuse of law.
And you will be liable for income tax as well as all penalties and criminal prosecution in Spain.

Do not believe to people who are trying to sell you just a dream about moving to UAS for some time, cash out your cryptos and move back to Spain afterwords. This is not how it works. One day, when you will be crying in a jail for a tax fraud, they will just declare, everything is your responsibility.

To cash out a crypto, you need more sophisticated structure. It is not cheap nor easy, But is it still possible. Do not believe those who promise you easy and cheap solutions. Expecialy if you are resident of high tax western country, what Spain is. They are just trying to sell you their services and they do not care about you in real.

Just moving to Dubai for 6 months, botain tax residence certificate, cash out crypto and come back to Spain, will be conssidered by spanish tax authority as abuse of law and they will deny to accept your UAS tax residence certificate as result of abuse of law and you will be taxed from all income + penalties + late tax payment interest + criminal prosecution..

And if he cashes out four year later after moving to Georgia, become there tax resident, obtaining tax certificate and having no ties in terms of center vital of interests with his native country (no properties, children, wife, etc.? (Just asking if is legally possible or is something that no matter in terms of time when he cashes out)

He could have these cryptos in stablecoins and mantain their value in a cold wallet if he don't want to be exposed to the volatility during this period of time.

The only problem that I see is as you funded your exchange accounts through a spanish bank, normally you should return these profits to the same bank, so you should mantain this bank account and when this money appear in your account no idea is this action could have consequences fiscally.

One doubt that I have is when you move to another country, closing all your bank accounts in your native country is something mandatory or simply recommended.

 

[Fred]

And if he cashes out four year later after moving to Georgia, become there tax resident, obtaining tax certificate and having no ties in terms of center vital of interests with his native country (no properties, children, wife, etc.? (Just asking if is legally possible or is something that no matter in terms of time when he cashes out)

He could have these cryptos in stablecoins and mantain their value in a cold wallet if he don't want to be exposed to the volatility during this period of time.

The only problem that I see is as you funded your exchange accounts through a spanish bank, normally you should return these profits to the same bank, so you should mantain this bank account and when this money appear in your account no idea is this action could have consequences fiscally.

One doubt that I have is when you move to another country, closing all your bank accounts in your native country is something mandatory or simply recommended.

Closing all your bank accounts in your native country is simply recommended otherwise you give the tax authorities some unnecessary substance in your native country you are no longer living in.

 

[50btcboy]

It's difficult to say. I have left my small apartment to my relatives. So, tax authorities tried to prove I still own that apartment. If it's under YOUR company name or some relative or related person, they can say you still owe it. But the most important part is that you do not stay physically in your country, so then even if you have some assets in your countries they cannot prove that your HOME is there. You have to have HOME in other country.

What I am trying to say, that these promotions of Emirati ID and tax certificate sounds nice, but in reality, it will not be enough to claim tax non-resident in serious European countries like Spain, France, Italy.

Unitred Kingdom included?

 

[user9823671]

Unitred Kingdom included?

I cannot speak for now, but previously the UK was not as strict as EU countries.

 

[iamk2r]

Hey guys, - quick question to @Fred - say u got the Dubai set up, how do u run the relationship w the exchanges? Is it like getting a corporate account at Kraken for the Dubai entity??

 

[Fred]

Hey guys, - quick question to @Fred - say u got the Dubai set up, how do u run the relationship w the exchanges? Is it like getting a corporate account at Kraken for the Dubai entity??

That's the way to go for personal bank account and personal Kraken account.

For the Dubai Company other ways are used - keep this for us in respect to the already paying clients.

In General: We are no magicians - that means everything we provide during our consulting to our clients is public information you can figure out if you are willing to put in the hours. Most people are fine with a consulting fee to save up the time.

 

[RBraun]

Just moving to another country for 183 days, withdraw a profits which would be taxable in a Spain in case of not doing it, and comming back next year is considered by spanish tax authorities as abuse of law.
And you will be liable for income tax as well as all penalties and criminal prosecution in Spain.

Do not believe to people who are trying to sell you just a dream about moving to UAS for some time, cash out your cryptos and move back to Spain afterwords. This is not how it works. One day, when you will be crying in a jail for a tax fraud, they will just declare, everything is your responsibility.

To cash out a crypto, you need more sophisticated structure. It is not cheap nor easy, But is it still possible. Do not believe those who promise you easy and cheap solutions. Expecialy if you are resident of high tax western country, what Spain is. They are just trying to sell you their services and they do not care about you in real.

Just moving to Dubai for 6 months, botain tax residence certificate, cash out crypto and come back to Spain, will be conssidered by spanish tax authority as abuse of law and they will deny to accept your UAS tax residence certificate as result of abuse of law and you will be taxed from all income + penalties + late tax payment interest + criminal prosecution..

It's true. I had tax investigation myself. I am tax expat. I can confirm that if amounts are larger barely having tax certificate would not be enough. They will ask for lots of proof you really moved outside the country: airlines tickets, rental agreements, utility bills, residency certificate and all other proofs like (membership at clubs, newspaper memberships, doctor visits confirmations). I still had my apartment in my home country, so they asked neighbors if I was really not in the country etc. They do everything they can to prove I am still resident in my home country. Even though I have spent only 2 weeks a year on Holiday in my home country...
You really must have lots of substance in UAE to be a real tax resident there and not be tax resident in home country.

@Fred

Hi, I've been reading the forum, I'm in a similar position to many people here, I'm in the UK and have a large crypto holding which I wish to partially cash out. Your posts have been very elucidating and I actually feel that you may have the best solutions for people like me. But reading the above posts which I quoted scares me somewhat. What can we do to make sure that this doesn't happen to me if I try a UAE setup? Aside from closing my UK account, how do I prevent authorities trying to screw me? I have faith in your wisdom and look forward to working together, but I do honestly have those concerns, I hope that's understandable. Cheers.

 

[Fred]

@Fred

Hi, I've been reading the forum, I'm in a similar position to many people here, I'm in the UK and have a large crypto holding which I wish to partially cash out. Your posts have been very elucidating and I actually feel that you may have the best solutions for people like me. But reading the above posts which I quoted scares me somewhat. What can we do to make sure that this doesn't happen to me if I try a UAE setup? Aside from closing my UK account, how do I prevent authorities trying to screw me? I have faith in your wisdom and look forward to working together, but I do honestly have those concerns, I hope that's understandable. Cheers.

I do understand your concerns and I see the point of the quotes you mention.

First of all I'm German and since I canceled my residence in Germany, canceled all contracts, rental, bank accounts etc. there was no single message from the tax authority.

Of course if you keep your previous apartment in your name, the gym membership, your car and your phone contract the home country have the right to question everything.

If the setup done right, there is no chance for the tax authority to go after you especially in your case the UK are not enforcing so hard like Germany. From the point of Germany even the UK are considered some kind of tax haven.

Anyway the "worst case" scenario is you want to relocate after a short period of time back to the UK and remit UAE funds back to the UK. In this scenario you simply have to live in the UAE for 6 months every year for 1-2 year and no substance in the UK - make sure you travel around additional 3 months or so and then nobody can do you anything.

In this scenario we even work with local lawyers that can check upfront with the tax authority of your home country.

Again I'm talking from the practice and as German I know what enforcement of tax authority really means.

If you want to have a personal call send me PM.

 

[khinkali]

@RBraun since about 8 years ago, tax residence rules in the UK changed completely. I recommend that you look at UK Statutory Residence Test. These rules rules are very different from most European and G20 countries.

There are also some nice flowcharts like this from various lawyers and accountants who have knowledge in this area. Things can be updated so I would use one of the flowcharts to get an idea of where you stand and confirm it with HMRC's guidance (or even better, an actual UK tax professional). Personally I think the new system is much better. It conflicts with most of the advice you read in forums but it's clearer and you don't end up worrying about ending up in court over where you kept your golf clubs or scuba gear.

There should not be any "one size fits all" advice for moving residence. The tax treatments when moving from UK, Spain, USA, Australia, etc. are all very different.

 

[user9823671]

@Fred
how do I prevent authorities trying to screw me? I have faith in your wisdom and look forward to working together, but I do honestly have those concerns, I hope that's understandable. Cheers.

You do it properly, not like many on here try to do - cheat the system. Even if you keep ties to the UK, bank account or an address. As long as you are actually living in the UAE with proof which if you are you will have (rent / utilities / bills / receipts) then it will be ok, even if audited. If you try and cheat the system or even play the game fine i.e. keeping out the country for +1 day more than needed, return to visit often, stay for longer than a weekend on those visits, come back for birthdays, weddings, funerals, nights out with the boys, then it is harder to claim. But it is quite simple. Move to UAE for a MINIMUM of (x) days and live there - not be on holiday, not temporary hanging out, but live there, do not visit the UK (except emergencies - funerals perhaps) and you will be fine.

As above the UK is not so strict.