Short tax residency options

[glengoolie]

the non-dom is supposedly irrelevant. this is the answer i got:

Answer is very straight forward.
You would require to register as self employed, and pay relevant contributions, depending on level of income, subject also to CAP on contributions. They mere fact of being non-dom, is irrelevant, as any benefit of non dom, is related entirely to defence tax contributions.

the thing is that i believe there are two philosophies, one says you are ok and CGT is 0%. the other says no, you have to be self-employed and pay income tax.

just like you said yourself. so even the accountants do not know themselves and i think that says a lot about the state of law in Cyprus.

personally i am on the side of 0% CGT applies but when you cannot get unified answer from the accountants themselves, obviously there is a big issue of uncertainty and risk of Cyprus taxman hitting you with taxes later on.

i will ask the government directly. maybe i will get a straight answer.

 

[glengoolie]

here is the latest version if the tax law, maybe someone can translate the parts that we're interested in here?
https://www.ilo.org/dyn/natlex/docs/ELECTRONIC/104733/127878/F716127051/CYP104733 Grk.pdf

 

[CyprusLaw]

here is the latest version if the tax law, maybe someone can translate the parts that we're interested in here?
https://www.ilo.org/dyn/natlex/docs/ELECTRONIC/104733/127878/F716127051/CYP104733 Grk.pdf

This is the publication in the gazette for an amendment on the VAT law in 2016, completely irrelevant :s

 

[glengoolie]

great

Because of this you need the non-domiciled status.

I can just give the info of 3 different accountants I personally spoke to about this in Cyprus.

2 of them told me that (with the non-domiciled status) you can trade stocks for youself in your own name and you pay only 2.65% tax for GESY up to 184.000€/year on your profits. One of these accountants was Deloitte.

1 accountant told me that there is a possibility that the tax authorities say you are a "professional trader", respectively your main income is from trading and because of this they will tax you with income tax.

I don't know what is true.

ok, so another accountant just told me that no tax. no self employment. so i have two accountants disagreeing with each other. you have two that say no tax and one maybe. so that is 3 no tax, 1 tax, 1 maybe. i can't even...

to quote:

Trading of securities is outside the scope for vat -> no tax. You can register voluntarily for social securities in order to also have access to the national health care system. If you wish to trade as unemployed, this is fine, we would also have to prepare and submit for you your annual tax returns each year showing your tax free profits from trading of securities.

and when asked about the necessity of trading through a company

Trading of securities is outside the scope for vat -> no tax. We have tax rulings stating this. We can also get a tax ruling for you verifying this.

oh, don't forget mr CyprusLaw that says pro-tax so that is 3 no tax, 2 tax, 1 maybe.

 

[Cyprustr]

Because of this you need the non-domiciled status.

I can just give the info of 3 different accountants I personally spoke to about this in Cyprus.

2 of them told me that (with the non-domiciled status) you can trade stocks for youself in your own name and you pay only 2.65% tax for GESY up to 184.000€/year on your profits. One of these accountants was Deloitte.

1 accountant told me that there is a possibility that the tax authorities say you are a "professional trader", respectively your main income is from trading and because of this they will tax you with income tax.

I don't know what is true.

I've talked with a lot of tax accountants and each one says something different:

Most of them say that the only thing I have to pay is GHS. But if my turnover is more than 70000 euros I have to do audited financial statements. And I'm talking about reliable ones like PWC.

There are other's that say that I don't have to pay nothing and I don't even need to do audited financial statements if my turnover is more than 70000 euros because the sale of securities is exempt from that requirement.

Note: Some said that maybe I need to be self-employed to get the yellowe slip because inmigration maybe asks me for it. But it's not necessary to be self-employed for trading securities WITH MY OWN MONEY and FOR MYSELF.

""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""2

And one said that I have to pay social Insurance and be self-employed. He didn't give me much coinfidence cause they looked like not updated.

He: If you are not self-employed what are you gonna be?

Me: Unemployed. Because I'll do it with my own money, I don't offer services to third people.

He: You have to be register as unemployed and be receiving suside from goverment.

I stopped listening,

""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""

Summing it up: The importnat thing is that you do it with your own money and you don't offer servies to third persons. So you only pay GHS

Anyway I sent an email To GHS and in theory they will reply to me. I guess I'll have to pay 2,65% GHS as income earner. But not social Insurance to be paid. I'll also go in person to the tax office and social insurance office because they don't answer through email neither calls.

 

[CyprusLaw]

I've talked with a lot of tax accountants and each one says something different:

Most of them say that the only thing I have to pay is GHS. But if my turnover is more than 70000 euros I have to do audited financial statements. And I'm talking about reliable ones like PWC.

There are other's that say that I don't have to pay nothing and I don't even need to do audited financial statements if my turnover is more than 70000 euros because the sale of securities is exempt from that requirement.

Note: Some said that maybe I need to be self-employed to get the yellowe slip because inmigration maybe asks me for it. But it's not necessary to be self-employed for trading securities WITH MY OWN MONEY and FOR MYSELF.

""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""2

And one said that I have to pay social Insurance and be self-employed. He didn't give me much coinfidence cause they looked like not updated.

He: If you are not self-employed what are you gonna be?

Me: Unemployed. Because I'll do it with my own money, I don't offer services to third people.

He: You have to be register as unemployed and be receiving suside from goverment.

I stopped listening,

""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""

Summing it up: The importnat thing is that you do it with your own money and you don't offer servies to third persons. So you only pay GHS

Anyway I sent an email To GHS and in theory they will reply to me. I guess I'll have to pay 2,65% GHS as income earner. But not social Insurance to be paid. I'll also go in person to the tax office and social insurance office because they don't answer through email neither calls.

The position in Cyprus is debatable, however, I note that the tax department’s position and also most of the big four is that it is taxable as income.

Whoever says that it is tax exempt is just doing so to get clients. You can not exempt something which is not defined in a legal framework. So you cannot consider it as security if it’s not defined as such. Anything not fall under a particular legal framework is considered and taxed as income.

 

[Cyprustr]

The position in Cyprus is debatable, however, I note that the tax department’s position and also most of the big four is that it is taxable as income.

Whoever says that it is tax exempt is just doing so to get clients. You can not exempt something which is not defined in a legal framework. So you cannot consider it as security if it’s not defined as such. Anything not fall under a particular legal framework is considered and taxed as income.

I'm talking about securities (shares, bonds, options, etc). They are exempt from income tax in the chapter 8 of Income tax law.

2 out of 4 big four says that for trading securities we just have to pay GESY. And the other 2 I think they will say the same just that I'm not gonna ask them because they charge before giving information.

Deloitte said to gmbh:
2 of them told me that (with the non-domiciled status) you can trade stocks for youself in your own name and you pay only 2.65% tax for GESY up to 184.000€/year on your profits. One of these accountants was Deloitte.

PWC said to me:

That I only have to pay GHS for trading securities as an individual. I don't have to pay for social Insurance.

 

[Piano]

The position in Cyprus is debatable, however, I note that the tax department’s position and also most of the big four is that it is taxable as income.

Whoever says that it is tax exempt is just doing so to get clients. You can not exempt something which is not defined in a legal framework. So you cannot consider it as security if it’s not defined as such. Anything not fall under a particular legal framework is considered and taxed as income.

and if you trade for a propietary trading firm and are paid % of profits ?
probably best to use a company for that ?

 

[CyprusLaw]

and if you trade for a propietary trading firm and are paid % of profits ?
probably best to use a company for that ?

Just to clarify, if you are trading listed stocks this is tax exempt.
Forex and crypto trading are not tax exempt

 

[Cyprustr]

Just to clarify, if you are trading listed stocks this is tax exempt.
Forex and crypto trading are not tax exempt

I see that you know about companies in Cyprus.

Can you tell me the meaning of turnover in Cyprus tax law ? It's to understand if I have to submit audited financial statements.

 

[Konstanz]

Cyprus not worth anymore because of that 2.65%.
You will not only have to pay 2.65%, but declare it , consult with tax advisors. It's just additional expenses.
You can have UAE residency travel/live in Europe different places and pay 0 and no headache

 

[CyprusLaw]

I see that you know about companies in Cyprus.

Can you tell me the meaning of turnover in Cyprus tax law ? It's to understand if I have to submit audited financial statements.

I note that Cyprus companies must submit audited financial statements regardless of turnover, rhe first one 18 months after incorporation and yearly thereafter.

The 70,000 turnover relates only to self employed individuals.

 

[Cyprustr]

Cyprus not worth anymore because of that 2.65%.
You will not only have to pay 2.65%, but declare it , consult with tax advisors. It's just additional expenses.
You can have UAE residency travel/live in Europe different places and pay 0 and no headache

The problem is that I'm stuck here already because of covid. If not I would've been somewhere else.

I note that Cyprus companies must submit audited financial statements regardless of turnover, rhe first one 18 months after incorporation and yearly thereafter.

The 70,000 turnover relates only to self employed individuals.

Individuals don't have to submit audited financial statements even if they have the 70000 turnover?

I guess it's only for self-employed and companies because the requirement is in the companies law, right? So only self-employed and companies have to do audited financial statements?

 

[CyprusLaw]

The problem is that I'm stuck here already because of covid. If not I would've been somewhere else.

Individuals don't have to submit audited financial statements even if they have the 70000 turnover?

I guess it's only for self-employed and companies because the requirement is in the companies law, right? So only self-employed and companies have to do audited financial statements?

correct, companies regardless of turnover; and self employed individuals with over 70,000 turnover

 

[Cyprustr]

correct, companies regardless of turnover; and self employed individuals with over 70,000 tA

Are you sure that individuals with more than 70000 euros turnover don't have to do audited financial statements?

Sorry for asking again. But I need to be sure.

 

[CyprusLaw]

Are you sure that individuals with more than 70000 euros turnover don't have to do audited financial statements?

Sorry for asking again. But I need to be sure.

Self-employed individuals have an obligation to prepare audited accounts if their total income (business income and other income like rents, dividends, interest etc) exceeds EUR70.000.

If a self-employed person has business income which is less than EUR70.000 but also other incomes such as rents, dividends or interest which in total exceed EUR70.000 (business income and other incomes), then the self- employed person has an obligation to prepare audited accounts and include such incomes. This applies only to self-employed persons who exercise a business activity. It does not apply to pensioners or employees.

 

[Cyprustr]

if we look at the tax law, it does not define self-employment nor requirements for it, but it defines investment:

«investment income» means any income which is not derived or arising from any business, employment, pensions or annuities which are paid by reason or in connection with a past employment;

since trading stocks is not a business, employment... one shall be unemployed and be able to make income(which will be exempt from income tax) based on one's investments without the need to be forced into self-employment scheme.

This changes everything for good. I've read income tax law. And the definition of investment income appears. And it was updated the 01/01/2020.

The definition I found in the Income tax law :

"Investment income" means any income which is notacquired or resulting from any business, from hired services,pensions or other annual income paid due to or
with respect to paid services provided;

So in theory it's not required to do audited financial statements and to be self-employed. Just is required to pay 2,65% GHS.

 

[Vampp]

Go Romania, 1% income tax for a LLC ( up to 1M Eur a year), 5 % on dividends.
Have clean money all over the world. I don't how understand what normal country would sign a treaty with Romania, but that is that.

You need 183 days, but nobody is counting, we have over 5M people working in the West of Europe and nobody knows who when where. No man's land.
Normally you should declare if you leave the country over 183 days to move your fiscal residence, but nobody does it. Cash is still in power and it's US vs Them on the relationship with the state. Tax evasion is a national sport, probably this is why tax is so low for smart ppl.

 

[Piano]

Go Romania, 1% income tax for a LLC ( up to 1M Eur a year), 5 % on dividends.
Have clean money all over the world. I don't how understand what normal country would sign a treaty with Romania, but that is that.

You need 183 days, but nobody is counting, we have over 5M people working in the West of Europe and nobody knows who when where. No man's land.
Normally you should declare if you leave the country over 183 days to move your fiscal residence, but nobody does it. Cash is still in power and it's US vs Them on the relationship with the state. Tax evasion is a national sport, probably this is why tax is so low for smart ppl.

Sounds good , also for trading forex , stocks ...1% ?

 

[Vampp]

@Piano

Well I will say it again to be clear 1% on income (you need to have 1 employee with at least minimum wage for 2 months, after you can put yourself on unpaid leave and still stay on 1%).
Let's say you make Iphones, you sell them for 1M and even tough your expenses are 100k or 900k, your tax is 10.000 units.
On the profit, you pay another 5% (dividends) and you have clean money anywhere in the world.

For forex, stocks they charge everything it enters the bank.
I use Etoro, to mingle around with copy trading as I was to retarded to invest, and kept hundreds of K stashed in banks until 2021. Lucky I'm 31 and it was not too late for me, I started with 100k and plan to invest up to 500k this year. I pay taxes only on the profits I take from Etoro as I invested as a private person.

If you create a new company, borrow it with let's say 100k, start investing, earn 300k that year, you can take the initial 100k out (the loan you made), pay 3k in taxes, decide if you take out dividends or not and pay 5% on how much you plan to take out as a private person.
The only issue with the Romanian companies is the accounting, which is a pain. Very few accountants are Tax efficient or know complicated laws in order to provide a good taxation. I specialized in that.