Crypto taxation, non-dom

[hille9966]

We are currently thinking of relocating to Cyprus. There are various reasons for this, including lifestyle and tax. We own different assets in different countries (private businesses, private shareholdings, publicly traded stocks, some crypto).

I hold a sizeable Bitcoin and Ethereum portfolio in personal name that has significant unrealised gains. These are mainly "buy and hold" holdings over 4-5 transactions that were built up during 2017-2020 with no trading. In 2021 I exited part of this position through a few sell transactions, but have still retained a significant part of it.

If we were to relocate to Cyprus and I would liquidate my position, how would these gains be taxed? I did research and it seems gains from a "capital nature" (i.e. non-trading income) as an individual are supposedly tax exempt. Does the Cypriot tax authority generally take this view? Any guidance on how they would rule here?

It also seems 21 working day tax rulings are available. Since this is Cyprus, does the tax office actually take 21 days to deliver a positive answer?

 

[CyprusLawyer101]

Yes, it does take 21 working days, through the expedite procedure.

If your gains do not fall under trading income they should be exempt. You can apply for a ruling for this or avoid the risk and structure it differently so it avoids the questioning of tax.

Your current country of residence is also important though as you will need to check on potential exit taxes and how crypto are taxed in general. Timing of changing tax residency and converting crypto is also important here.

I will be happy to pm you and discuss matters further. Kindly let me know.

 

[hille9966]

Thanks for the swift reply. Please do!

 

[clemens]

Yes, it does take 21 working days, through the expedite procedure.

If your gains do not fall under trading income they should be exempt. You can apply for a ruling for this or avoid the risk and structure it differently so it avoids the questioning of tax.

Your current country of residence is also important though as you will need to check on potential exit taxes and how crypto are taxed in general. Timing of changing tax residency and converting crypto is also important here.

I will be happy to pm you and discuss matters further. Kindly let me know.

Do you have a website with your consultant services?

 

[dandiskahn]

Yes, it does take 21 working days, through the expedite procedure.

If your gains do not fall under trading income they should be exempt. You can apply for a ruling for this or avoid the risk and structure it differently so it avoids the questioning of tax.

Your current country of residence is also important though as you will need to check on potential exit taxes and how crypto are taxed in general. Timing of changing tax residency and converting crypto is also important here.

I will be happy to pm you and discuss matters further. Kindly let me know.

Did you ever obtain yourself a tax ruling where the crypto gains were deemed as of capital gain nature and hence not taxed? If anything, can you give us a ballpark success rate for such cases?
Assuming the client never traded crypto but just held over time for years.

I'm asking because I've read online many such cases and it seems the tax office always deems those gains as income. I would like to use your services as well for a similar situation, but I need to know the chances of success before embarking on this process.