Question How meticulously Cyprus checks you spending less than 183 days overseas with 60 day non-dom status?

[Matade]

Once you get Cyprus non-dom you can spend only 60 days in Cyprus and maintain it assuming you have NOT spent more than 183 days in another country.

Question: how accurately is this checked?

They want to know in which countries you have spent your time.

But if one were to spend 10 months in country A without registering there as tax resident, then travel to country B and then travel to Cyprus, then say you spent 4 months in Country A and 4 in Country B, would Cyprus just take your word for it?

They cannot prove you haven't done it, so they should theoretically be OK with it as long as you spend 60 minimum in Cyprus and maintain a property or rent there, correct?

 

[Matade]

Bump, nobody knows this?

 

[jafo]

Matade said:
you have NOT spent more than 183 days in another country.
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What if you spent 10 months in Monaco?
What are they going to claim? You owe taxes in Monaco? (PIT does NOT exist in Monaco). There are NO border checks in Monaco.

 

[Matade]

jafo said:
What if you spent 10 months in Monaco?
What are they going to claim? You owe taxes in Monaco? (PIT does NOT exist in Monaco). There are NO border checks in Monaco.
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Good point, how would it work?
Can't you theoretically claim anything as long as you spend the 60 minimum days in Cyprus?

 

[jafo]

I suspect they will look at your entry and exit stamp, which is something easily remedied with an alternative passport (another citizenship).

For example, if you fly to Hong Kong, your passport won't be stamped either, so I'm not sure how they will check it.

I think it's more wishful thinking and trying to keep the EUSSR off their backs. Not everybody subscribes to the EUSSR's enslaving philosophy.

Maybe @Don can answer this question.

 

[Don]

jafo said:
I suspect they will look at your entry and exit stamp, which is something easily remedied with an alternative passport (another citizenship).

For example, if you fly to Hong Kong, your passport won't be stamped either, so I'm not sure how they will check it.

I think it's more wishful thinking and trying to keep the EUSSR off their backs. Not everybody subscribes to the EUSSR's enslaving philosophy.

Maybe @Don can answer this question.
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Matade said:
Once you get Cyprus non-dom you can spend only 60 days in Cyprus and maintain it assuming you have NOT spent more than 183 days in another country.

Question: how accurately is this checked?

They want to know in which countries you have spent your time.

But if one were to spend 10 months in country A without registering there as tax resident, then travel to country B and then travel to Cyprus, then say you spent 4 months in Country A and 4 in Country B, would Cyprus just take your word for it?

They cannot prove you haven't done it, so they should theoretically be OK with it as long as you spend 60 minimum in Cyprus and maintain a property or rent there, correct?
Click to expand...

In my view, the 183-day rule is basically there to stress that, as a non-domiciled person, you can not qualify for income tax relief based on double tax treaties when you work 183 days in another country.
Best is to keep some proof that is in line with the non-dom requirements.

 

[Sols]

They don't check. Unless you give them a reason to check.

IIRC, the regulations don't say you can't spend more than 183 days in another country. The regulations say you can't be tax resident anywhere else, which can happen much sooner than 183 days.

Toggle signature
This is the probably the answer to your question.

 

[Don]

Sols said:
They don't check. Unless you give them a reason to check.

IIRC, the regulations don't say you can't spend more than 183 days in another country. The regulations say you can't be tax resident anywhere else, which can happen much sooner than 183 days.
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I don't think what you are saying is correct as it is not in line with, e.g., KPMG guidance which states that:

An individual who does not stay in any other country for one or more periods exceeding in aggregate 183 days in the same and is not tax resident in any other country for the same year, is deemed as tax resident in Cyprus in that year, if the following conditions are cumulatively met:
(i) the individual stays in Cyprus for at least 60 days in the year,
(ii) exercises a business and/or is employed in Cyprus and/or holds an office with a Cyprus tax resident company at any time during the tax year,
(iii) maintains (by owning or leasing) a permanent home in Cyprus.
The law is further amended to clarify that an individual that cumulatively meets all the above conditions shall not be treated as a Cyprus tax resident in the year, if during that year the exercise of any kind of business in Cyprus and/or employment in Cyprus and/or holding of an office with a tax resident person in Cyprus, is terminated.

 

[Sols]

12345 said:
I don't think what you are saying is correct as it is not in line with, e.g., KPMG guidance which states that:

An individual who does not stay in any other country for one or more periods exceeding in aggregate 183 days in the same and is not tax resident in any other country for the same year, is deemed as tax resident in Cyprus in that year, if the following conditions are cumulatively met:
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Seems to be both 183 days or tax resident.

Toggle signature
This is the probably the answer to your question.

 

[Don]

Sols said:
Seems to be both 183 days or tax resident.
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Dear Sir, English is not my native language, but AFAIK:

• if you are using "both," you need to have two comparable elements joined by "and.";
• "or" suggests a choice between alternatives, which is not logically consistent in this context.

 

[Matade]

The question is, in practice, can you just spend minimum 60 days and CLAIM you spent less than 183 in two other jurisdictions?
How can they prove you haven't done it?

 

[Don]

Matade said:
The question is, in practice, can you just spend minimum 60 days and CLAIM you spent less than 183 in two other jurisdictions?
How can they prove you haven't done it?
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If it's not obvious (e.g., by looking at your passport), I would not worry about it.

 

[Sols]

Matade said:
The question is, in practice, can you just spend minimum 60 days and CLAIM you spent less than 183 in two other jurisdictions?
How can they prove you haven't done it?
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The thing with tax law is that it's almost never up to the government to prove anything. Tax laws usually say that you are required to provide truthful statements to the government. If the government ever gets suspicious about your statements, there are many situations where the burden of proof is reversed and you're presumed guilty until you prove your innocence.

But in Cyprus? Very low risk of anything happening. Just don't do anything stupid, buying a house in Spain and living there 300 days per year while posting about it on social media.

Toggle signature
This is the probably the answer to your question.

 

[Matade]

Sols said:
The thing with tax law is that it's almost never up to the government to prove anything. Tax laws usually say that you are required to provide truthful statements to the government. If the government ever gets suspicious about your statements, there are many situations where the burden of proof is reversed and you're presumed guilty until you prove your innocence.

But in Cyprus? Very low risk of anything happening. Just don't do anything stupid, buying a house in Spain and living there 300 days per year while posting about it on social media.
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Okay, but in this case, if the burden of proof was reversed on the person, Cyprus would be actively trying to prove that the person is NOT tax resident of Cyprus and should NOT pay tax to them. This doesn't make sense at all and would be against interests of the Cyprus government.

And if you indicate two countries, how on earth can they determine which one you are tax resident of? They don't actually know foreign jurisdictions as well, so it makes no sense for them to waste time doing it.

Do you see what I'm saying? Incentives. What incentives could Cyprus potentially have to try claim that:
"Despite you spending 60 days in Cyprus, we don't really believe you didn't spend less than 183 days in another country."
"Okay, so you don't want to consider me a tax resident? I don't have to pay tax here?"
"..."

See the issue?

Just to illustrate even clearer.

- Let's say citizen of Bulgaria gets non-dom and tax residence in Cyprus.
- They spend 60 minimum days in Cyprus.
- They CLAIM that they spent 5 months in Bulgaria and 5 months in Romania. They may show some proof like tickets.
Now. Will Cyprus government:
A) try to convince or prove the person actually spent more than 183 days in Romania / Bulgaria and should be tax resident in that jurisdiciton instead?
B) Or will they just take the word for it and collect your tax.
It's up to Romania / Bulgaria to prove the person is their tax resident.
It is definitely not job of Cyprus and Cyprus wouldn't even know where to start. Countries have slightly different laws when it comes to claiming tax residence.

So to me it makes no sense for Cyprus to challenge your claims UNLESS (and this is very important) any other jurisdiction lays claim on you as tax resident.
If there are no challenging jurisdictions, they should just accept your word for it, what else are they going to do? Not charge you tax, because they aren't sure you are still their tax resident? "Sorry, we aren't sure we should be taking your money" - said no government ever, lmao

 

[Don]

Matade said:
Okay, but in this case, if the burden of proof was reversed on the person, Cyprus would be actively trying to prove that the person is NOT tax resident of Cyprus and should NOT pay tax to them. This doesn't make sense at all and would be against interests of the Cyprus government.
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The only incentive I can see is if you will be treated as a Cyprus tax resident but not as a non-dom (in such case, you are looking at 17% SDC tax + up to 35% personal income tax).

 

[Sols]

Matade said:
Okay, but in this case, if the burden of proof was reversed on the person, Cyprus would be actively trying to prove that the person is NOT tax resident of Cyprus and should NOT pay tax to them. This doesn't make sense at all and would be against interests of the Cyprus government.
Click to expand...

They will still gladly take your money. They just wouldn't issue you a tax certificate if you asked for one, which is one of the main reasons many people go for the 60 day tax residence scheme.

Toggle signature
This is the probably the answer to your question.

 

[jafo]

Matade said:
Okay, but in this case, if the burden of proof was reversed on the person, Cyprus would be actively trying to prove that the person is NOT tax resident of Cyprus and should NOT pay tax to them. This doesn't make sense at all and would be against interests of the Cyprus government.

And if you indicate two countries, how on earth can they determine which one you are tax resident of? They don't actually know foreign jurisdictions as well, so it makes no sense for them to waste time doing it.

Do you see what I'm saying? Incentives. What incentives could Cyprus potentially have to try claim that:
"Despite you spending 60 days in Cyprus, we don't really believe you didn't spend less than 183 days in another country."
"Okay, so you don't want to consider me a tax resident? I don't have to pay tax here?"
"..."

See the issue?

Just to illustrate even clearer.

- Let's say citizen of Bulgaria gets non-dom and tax residence in Cyprus.
- They spend 60 minimum days in Cyprus.
- They CLAIM that they spent 5 months in Bulgaria and 5 months in Romania. They may show some proof like tickets.
Now. Will Cyprus government:
A) try to convince or prove the person actually spent more than 183 days in Romania / Bulgaria and should be tax resident in that jurisdiciton instead?
B) Or will they just take the word for it and collect your tax.
It's up to Romania / Bulgaria to prove the person is their tax resident.
It is definitely not job of Cyprus and Cyprus wouldn't even know where to start. Countries have slightly different laws when it comes to claiming tax residence.

So to me it makes no sense for Cyprus to challenge your claims UNLESS (and this is very important) any other jurisdiction lays claim on you as tax resident.
If there are no challenging jurisdictions, they should just accept your word for it, what else are they going to do? Not charge you tax, because they aren't sure you are still their tax resident? "Sorry, we aren't sure we should be taking your money" - said no government ever, lmao
Click to expand...

Do NOT let solid logic, morals, or ethics blind you to ANY "government" Hanlon's razor! 😉

 

[Matade]

Don said:
The only incentive I can see is if you will be treated as a Cyprus tax resident but not as a non-dom (in such case, you are looking at 17% SDC tax + up to 35% personal income tax).
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Non-dom status is issued once for 17 years. If you stay 60 years in Cyprus, there should be no reason for non-dom to not be applicable.
They can't selectively accept certain parts of the law.
If they believe you aren't a tax resident of Cyprus, you don't pay any taxes in Cyprus (why would they do this? Stupid)
If they believe you are a tax resident of Cyprus, then it means you fulfill the 60 day criteria and fulfill the non-dom criteria as well, which means you don't pay SDC.

Sols said:
They will still gladly take your money. They just wouldn't issue you a tax certificate if you asked for one, which is one of the main reasons many people go for the 60 day tax residence scheme.
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Usually you won't need that tax certificate more than once anyway. People get it to prove to their original tax jurisdictions that they are tax residents elsewhere. Once that is done, you can live your life UNTIL another tax residence challenges your status. In which case, yes, you would need that paper, but if your status is being challenged, you may have done enough things to trigger tax residency potential in a different jurisdiction.

jafo said:
Do NOT let solid logic, morals, or ethics blind you to ANY "government" Hanlon's razor! 😉
Click to expand...

In my experience, when you know the laws and can point out the laws to bureaucrats it becomes way easier to deal with them. Unless they can refute the law with other articles that you have missed, they will bend quick, they can't go against what's written. Be polite, yet firm and do a craptown of research before hand, so you have answer to every question.