Paying corporate income tax only, cashing out later

[Dandyline]

Why wouldn’t you be able to use the money?

Money needs to sit in the holding company as long as you live in Sweden i guess.

 

[kkein]

Thanks. So it works even in Sweden.

Why isn’t everybody doing this then? Keep the money in a company/holding, move abroad , come back after a year or two. Assuming you want to stay in that country.
Exit tax is what should make this impossible and under ATAD, all EU countries should implement exit tax, as far as I know. But even exit tax isn’t charged, as long as you stay in the EU.
Sure, you’d have to cut your ties, but as long as there is a tax treaty and you can show that your ties were closer to the other country during that year, it should work? Spend 200 days in Cyprus one year and only 20 days in Sweden or wherever you’re from, travel the rest of the year. If there is a DTA, I can’t see how they could claim you should be tax resident anywhere else than Cyprus.

I don't think this would work in one year timeframe, especially if you are coming back after one year.
As you read on that page you linked, you need to prove you are moving abroad permanently, and it's not temporary. So what will you tell the tax office when you come back the next year? On a 5 years timeframe it might be doable, 10 better. 1? i wouldn't try but if you do pls report here

 

[JustAnotherNomad]

Money needs to sit in the holding company as long as you live in Sweden i guess.

Right. But many people are happy with that. You only pay corporate income tax and you can save the money. You can still pay yourself a small salary.

I don't think this would work in one year timeframe, especially if you are coming back after one year.
As you read on that page you linked, you need to prove you are moving abroad permanently, and it's not temporary.

Yes, but that’s only the Swedish side.
Sweden was a bad example - I was unaware of that Swedish rule. But if all the rule does is say “You are tax resident in Sweden for 5 years after you move away,” I can’t see how it would be relevant if there is a DTA and you live full time in another country for a year or two?

I understand that there probably are other rules to make this difficult or impossible, I’m just trying to understand it.
But it seems like this is indeed not possible the way I first thought because there usually is withholding tax to foreign tax residents even within the EU. The only way to do this would be with a foreign holding company like you mentioned, but this would require a good deal of substance and it would still be subject to exit tax. And even within the EU, the payment of the exit tax would only be postponed, but they could always change the law and make you pay it anyway.

 

[Dandyline]

Right. But many people are happy with that. You only pay corporate income tax and you can save the money. You can still pay yourself a small salary.



Yes, but that’s only the Swedish side.
Sweden was a bad example - I was unaware of that Swedish rule. But if all the rule does is say “You are tax resident in Sweden for 5 years after you move away,” I can’t see how it would be relevant if there is a DTA and you live full time in another country for a year or two?

I understand that there probably are other rules to make this difficult or impossible, I’m just trying to understand it.
But it seems like this is indeed not possible the way I first thought because there usually is withholding tax to foreign tax residents even within the EU. The only way to do this would be with a foreign holding company like you mentioned, but this would require a good deal of substance and it would still be subject to exit tax. And even within the EU, the payment of the exit tax would only be postponed, but they could always change the law and make you pay it anyway.

You are not a tax resident for 5 years. You only have the evidence burden on your side.

The day you move and cut all ties, that day you are no longer tax resident. If you can prove it. If you keep a low profile, they probably will never ask.

Most people are unaware of the rules and just moves away and dont report anything.