Short tax residency options

[glengoolie]

a) "And read the site I have sent you" you haven't posted any links in your previous posts so you are referring to maybe something that is missing in your previous comments(maybe that file you tried to attach but it just shows path to the file?)
b) what you list as CGT and is subject to CGT is correct but every other gain on capital is exempt, it's like you are ignoring this fact for some reason
c) in the link you posted it literally proves my point yet again

d) yet again i am not talking about corporate structure, link you posted is about corporate income, but investing from an individual's perspective

I, as an individual, do not have to be employed in order to make money. Either way, the income I will make will be subject for my income tax. But not all income sources are equal and CG is exempt, hence my tax basis for income tax, if I only make money through investing, will be 0€. Why is it so hard to understand?

if you click on the other taxes link in the screenshotted section it even explains it in detail.

 

[glengoolie]

again, not trying to be ahole, just back up what you're saying with a law, analysis or something relevant(link or just quote). we're all just trying to learn here. nothing wrong with that.

 

[CyprusLaw]

a) "And read the site I have sent you" you haven't posted any links in your previous posts so you are referring to maybe something that is missing in your previous comments(maybe that file you tried to attach but it just shows path to the file?)
b) what you list as CGT and is subject to CGT is correct but every other gain on capital is exempt, it's like you are ignoring this fact for some reason
c) in the link you posted it literally proves my point yet again
View attachment 2382

d) yet again i am not talking about corporate structure, link you posted is about corporate income, but investing from an individual's perspective

I, as an individual, do not have to be employed in order to make money. Either way, the income I will make will be subject for my income tax. But not all income sources are equal and CG is exempt, hence my tax basis for income tax, if I only make money through investing, will be 0€. Why is it so hard to understand?

if you click on the other taxes link in the screenshotted section it even explains it in detail.

Let's try one more time...the fact that it is tax exempt does not mean that you make money without declaring! As an individual fee earner you are liable for income tax, S.I and GHS. In your case you could be exempt from income tax, but you are not exempted from S.I and GHS.

I set out below a quote from the S.I guidelines which states who has the obligation to pay S.I

'Compulsorily insured persons Each employed person in Cyprus is compulsorily insured under the Social Insurance Scheme. The compulsorily insured persons are classified into two categories: the employed and the self-employed persons. Every employed or self-employed person should register on the Social Insurance Scheme within one month. Every person who is employed in the service of an employer, such as workers, employees in the private sector, public employees, semi-public employees and apprentices fall under the category of employed persons. Every person who performs any activities for his/her own account, such as traders, industrialists, artisans, farmers etc. fall under the category of self employed persons.'

Please take a look at the last line which clearly states that you fall under the self employed category.

In any event the fact that you insist as to the provisions of a legal system you are not aware of is bizarre to my eyes and for me there is no point carrying on this conversation. The only reason I am replying is because your stubbornness leads to posting misleading info in this thread.

 

[glengoolie]

the fact that it is tax exempt does not mean that you make money without declaring

i stated multiple times that this is not the case, why are you putting words into my mouth? i clearly said that you will declare this income, but this income is tax exempt. it is literally written in the tax law that i have linked to and quoted. that does not mean it is not declared on your return, IT IS TAXED WITH 0% CGT, which makes your taxable income basis 0€. hence there is not even point talking about the rest of your post. and based on your posturing with understanding the "provisions of a legal system" while simultaneously failing to backup anything you say with literally any prooof whatsoever just made me realize you actually are a hack.

 

[CyprusLaw]

i stated multiple times that this is not the case, why are you putting words into my mouth? i clearly said that you will declare this income, but this income is tax exempt. it is literally written in the tax law that i have linked to and quoted. that does not mean it is not declared on your return, IT IS TAXED WITH 0% CGT, which makes your taxable income basis 0€. hence there is not even point talking about the rest of your post. and based on your posturing with understanding the "provisions of a legal system" while simultaneously failing to backup anything you say with literally any prooof whatsoever just made me realize you actually are a hack.

Have you read the part I have sent you about paying social insurance? Your proposed activities are TAX exempt. social insurance and GHS are not taxes!!! You would still be liable to pay! This is why everyone sets up companies and does not simply freelance. In any event I hope that prior to coming to Cyprus you will take the advice of a professional tax advisor so you will finally realise what I am saying

 

[glengoolie]

i am not claiming social security or health care are taxes, i am saying, this entire time, over and over, that your tax basis will be 0€, since this entire income has been tax exempt/will be taxed at 0%, hence 2.65% of healthcare from taxable 0€ is 0€ and whatever the social security number is supposed to be according to you, it still will be 0€. that's what I am on and on about this entire time.

in other countries there are some minimums, like i have described for health care for example. but there is no social security payments since unemployed people don't pay any!

to expand on this. say you work a typical job and you earn 1000€ a month. every tax system has untaxable minimum that is tax exempt to avoid taxing people with low income. so let's say the non taxable income is 4000€ a year. so 12000 - 4000 = 8000€ will be your tax base from which the income tax is paid and based on which the health care insurance and social security will be payd, instead of the entire 12000€. same applies here but because the entire income is from capital gains, it is exempt completely, hence your tax base is 0€.

 

[CyprusLaw]

I am attaching a calculation example - here you will see that even though for example interest and dividends are taxed are 0% you still need to pay GHS and S.I on the income deriving from that.

https://taxsummaries.pwc.com/cyprus/individual/sample-personal-income-tax-calculation
I hope this generally helps with any questions.

 

[CyprusLaw]

to expand on this. say you work a typical job and you earn 1000€ a month. every tax system has untaxable minimum that is tax exempt to avoid taxing people with low income. so let's say the non taxable income is 4000€ a year. so 12000 - 4000 = 8000€ will be your tax base from which the income tax is paid and based on which the health care insurance and social security will be payd, instead of the entire 12000€. same applies here but because the entire income is from capital gains, it is exempt completely, hence your tax base is 0€.

In Cyprus up to 19500 is not taxable, however, you pay social insurance and GHS on that. For example if I declare EURO 100 per month I need to pay approximately 20-25 euro on S.I and GHS - but no tax.

 

[glengoolie]

as for the minimum healthcare insurance, that is in line with what i have been saying. even if you are unemployed, you have to pay a minimum health insurance which is usually based off of a calculation that uses the minimum allowed salaray numbers. depnding on the country, round 50€ a month. no dispute here. if you had some income that is more than the minimum salary, like you said 19 500€, then the payment will be calcualted off of that.

as for social insurance, again, that does not apply to unemployed people, anywhere!

even your own Ministry of Labour, Welfare and Social Insurance clearly states that:

The insured persons are classified in three categories; employed persons, self-employed persons and voluntary contributors.

if you are unemployed, you are not obligated to pay, you can, but you do not have to. literally not a single thing i have written in the 3 pages of this thread have been proven wrong

 

[CyprusLaw]

as for the minimum healthcare insurance, that is in line with what i have been saying. even if you are unemployed, you have to pay a minimum health insurance which is usually based off of a calculation that uses the minimum allowed salaray numbers. depnding on the country, round 50€ a month. no dispute here. if you had some income that is more than the minimum salary, like you said 19 500€, then the payment will be calcualted off of that.

as for social insurance, again, that does not apply to unemployed people, anywhere!

even your own Ministry of Labour, Welfare and Social Insurance clearly states that:

if you are unemployed, you are not obligated to pay, you can, but you do not have to. literally not a single thing i have written in the 3 pages of this thread have been proven wrong

Have you checked who is classified as a self employed? anyone earning income on hisnown account is deemed to be self employed. Also the 19,500 is the max income not liable to income tax. Any income under that is tax exempt but still liable to GHS and S.I. As I said if I am declaring 100 euro per month I need to pay around 25 for GHS and S.I.


In any event as I said I hope you will speak with a professional advisor prior to coming to Cyprus in order to get some clarity.

 

[glengoolie]

ok, now we can talk semantics. usually, self-employed means a person renders services to other people and issues them invoices for those services. since trading stocks, the subject of this thread, is not a render of services to other people, i am taking the stance that such person is not subject to self-employment and anything else that stems from such state. if this person would provide brokerage services, to other people, yes, that would fall into self employment. but again, no services are being rendered to other parties. plus, self employment always entails a subject of self employment, like car mechanic, programmer, marketing .... all of which entail render of services to someone...and there is no such category as stock trader. trading stocks and trading goods or services is not the same thing, because it is merely flipping of one's capital without involvement of other parties to whom any value is being rendered to....hence it cannot be subject to the same interpretation.

if you have counter argument, i am listening.

ps: here is a list of recognized self employment categories Social Insurance Services - Self Employed Persons Categories

there are two catch-all categories "10. Workers not classified in any other occupational category", but stock trader is not worker, he does not perform work for other people. And "16. Persons not classified in any other occupational category" which is the uber catch-all and could apply to stock trader. So this establishes a fact that any self employed person can fall into this category if his line of work is not recognized by the government. So now we need to establish the basis of this argument - when is government forcing you to become self-employed? what are the conditions and requirements to be fulfilled in order for unemployed person to be forced into self-employment status.

 

[glengoolie]

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.

 

[CyprusLaw]

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


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.

The fact that you are searching and finding probably outdated unofficial translations of a country I doubt you have ever even visited creates a number of questions. In any event, I will not carry this any more, especially in public, as it is getting confusing and annoying for the readers.

As I have mentioned in previous posts please get a formal opinion from a tax advisor as to your proposed structure of business.

One point- I am seeing random posts from you under numerous threads from different jurisdictions, where you are expressing quite strong opinions for jurisdictions you are not aware of their legal systems!!

 

[glengoolie]

same to you, buddy. same to you. you haven't backed up a single of your posts. i too have no need to further this discussion since you argue without substance. funnily enough, the only link to a resource you posted, trying to argue, directly proved my point.

and yes, i post questions to thrads about different juristictions. i am curious like that. so what, what's it to you? you want to proclaim to be now the "MalaysiaLaw" or "GeorgiaLaw" or what?

 

[CyprusLaw]

same to you, buddy. same to you. you haven't backed up a single of your posts. i too have no need to further this discussion since you argue without substance. funnily enough, the only link to a resource you posted, trying to argue, directly proved my point.

and yes, i post questions to thrads about different juristictions. i am curious like that. so what, what's it to you? you want to proclaim to be now the "MalaysiaLaw" or "GeorgiaLaw" or what?

You are not posting questions! You are posting opinion.
Also no the link I sent you does not prove your point, but in any event I will not argue anymore about your misconceptions.

 

[glengoolie]

ok, mr "law", who cannot quote a single paragraph of the actual law. cheers to you too.

 

[CyprusLaw]

ok, mr "law", who cannot quote a single paragraph of the actual law. cheers to you too.

I am simply trying to help you understand but apparently you believe that you understand everything by quoting outdated laws and articles!! Under the GHS law you would be considered as an income earner - if you look at article 19 of the law you have liability to pay 2.65% of your income - stressing 'income' not taxable or insurable income (the difference is apparent when you look at other provisions referring to 'earnings' instead of 'income' where earnings are defined as 'insurable earnings'. So the fact that your income may be tax exempt does not exempt you you from paying the 2.65% on the income for GHS.

‘income’ means the income of any natural person derived from the sources defined in section 5 of the Income Tax Law, other than remuneration or pension, and includes dividends, as defined in the Special Contribution for the Defence of the Republic Law.

In any event the above are merely assumptions on the basis of what you have described as your activities, once you discuss with a professional tax advisor I am sure you will get better clarity as to what will be the best structure for your business.

 

[lacomaco]

From the moment you earn income you have an obligation to be registered as a sole trader in Cyprus, this will bring an obligation for S.I payment and GHS payment

To manage your own funds and to earn income you need to register as a sole trader???? Hard to understand or believe...

 

[glengoolie]

An independent accountant from Cyprus confirmed what CyprusLaw said - if you want to trade stocks, you have to register as self-employed and pay income taxes, social security and health care insurance.

In other words, capital gains tax exemption no longer applies and instead you are being treated as earning normal income and pay up to 35% of income taxes on it.

So I apologize to CyprusLaw, who failed to provide single proof for his statements. But it is what it is.

If i take it as truth, then Cyprus makes sense only for companies and not individuals and one has to take into consideration the SCD and the overhead of running a company for these purposes.

tl;dr Cyprus is the same "scam" as Portugal's NHS program, just different flavour.

 

[gmbh]

An independent accountant from Cyprus confirmed what CyprusLaw said - if you want to trade stocks, you have to register as self-employed and pay income taxes, social security and health care insurance.

In other words, capital gains tax exemption no longer applies and instead you are being treated as earning normal income and pay up to 35% of income taxes on it.

So I apologize to CyprusLaw, who failed to provide single proof for his statements. But it is what it is.

If i take it as truth, then Cyprus makes sense only for companies and not individuals and one has to take into consideration the SCD and the overhead of running a company for these purposes.

tl;dr Cyprus is the same "scam" as Portugal's NHS program, just different flavour.

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.