Germany Exit Taxation - December 31st 2021 (EU ATAD Implementation)

[dor]

It's already happening. The smart, young people are leaving the EU in droves. Maybe some people still stay if they foresee a great corporate career, but almost all smart, young people I talk to have either already left, or they are strongly thinking about leaving. Normal, everyday people, who usually wouldn't thinking about tax optimization.

where are they leaving to then?

 

[scrawnycrewmate]

where are they leaving to then?

I have the same questions, not just about where to but also how to, since the ATAD regulations started getting implemented in more an more countries. The one affecting me in Cyprus is documented here: https://assets.kpmg/content/dam/kpmg/cy/pdf/2020/07/Anti-Tax-avoidance-directive-july-2020.pdf.

Sure, I'm ready to start planning, and to `escape`, but I'd like to know how to avoid the exit tax while doing so, because the How to may affect which country I need to consider on the ground of local legislation or DTA override in the country I'm moving to.

Should this message no longer be relevant to the original poster intent, let me know and I'll start a new Escape from the EU (ATAD, GDPR, QWACs and other acronym disasters). Sharing is caring.

 

[clemens]

Stupid question. But if I exchange my crypto to FIAT tax free as it is possible with my conditions, would I have to pay any exit tax if I leave ?

 

[Martin Everson]

Sure, I'm ready to start planning, and to `escape`, but I'd like to know how to avoid the exit tax while doing so, because the How to may affect which country I need to consider on the ground of local legislation or DTA override in the country I'm moving to.

Depends whether you mean escape as an individual or as a company? Some countries have gone as far as implementing it for individuals. The Cyprus Exit Taxation implementation you showed seems to be at a corporate level so far.

 

[scrawnycrewmate]

Depends whether you mean escape as an individual or as a company?

Sorry I should have been more specific. I guess I meant exiting the EU compliance overhead, or bringing it down to near zero.
So that I can dispose of the EU company part if the situation calls for it, having shifting retained earnings entirely over time.

Cyprus companies are usually good as holding companies, but in this instance, the Cyprus company should be wholly owned by another entity that will receive the past retained earnings in yearly tranches of dividends.

I would assume this works because Cyprus has no dividend withholding, although I'm not clear on whether paying out dividends out of retained earnings that are older than 1 year old is OK tax wise.

Also the jurisdiction of the holding company then matters (it should ideally not tax those incoming dividends), and there lies the nexus of my question: what are the setups (read: ideal target jurisdictions for my example of a CY company) that allow this orderly exit over time.

After that, the Cyprus company is a ghost of its former self, and can be disposed of rather easily. If one still needs an EU VAT ID, the company can be retained, as long as the maintenance costs (audit and accounting) are not prohibitive.

I think it would be a good idea to have pinned posts that document common patterns so that people who have access to counsel can fact check them for the benefit of others. I for example am fact checking the US-CY and CY-only pattern for Amazon US FBA (which will take time), and will soon fact check the CY-Winddown pattern, with diagrams and stuff like that. But I don't have a good place to put this in.

 

[Alonzo]

Yup this is coming for sure to EU. Maybe France will do it first as it has lost literally 1000's of millionaires .

This will become a reality if Mélenchon becomes president.

He said that he will tax wealthy French citizens based on citizenship.
Getting Exit taxed then Citizenship taxed every year is pure criminality.