Uk resident + Cyprus Company DTA

[Nanoo]

My question is, if i incorporate a Cyprus company as a UK resident i could use the DTA to pay only 12.5% of coporation tax in Cypris and prove to HMRC that i paid the tax in Cyprus to avoid paying them in UK as well?

Here's a example tell me if it's correct and legal.

1. UK resident.
Company in Cyprus.
100k$ profit in 2019 (kept in the cyprus corporate bank account).
12.5% to pay in Cyprus
0% to pay in UK

I think this thread will help multiple people to figure out the best use of the DTA for for uk resident.

 

[Nanoo]

Here's more details for example 1.
Company registered using nominee director + shareholder.
I will manage the company from UK but it's a dropshipping business, no offices, wharehouse and no income come from UK.
I will use only a laptop + Cyprus vps to manage the online business.

 

[happyjohn]

Nanoo said:
My question is, if i incorporate a Cyprus company as a UK resident i could use the DTA to pay only 12.5% of coporation tax in Cypris and prove to HMRC that i paid the tax in Cyprus to avoid paying them in UK as well?

Here's a example tell me if it's correct and legal.

1. UK resident.
Company in Cyprus.
100k$ profit in 2019 (kept in the cyprus corporate bank account).
12.5% to pay in Cyprus
0% to pay in UK

I think this thread will help multiple people to figure out the best use of the DTA for for uk resident.
Click to expand...

yes that's how this works. It's not difficult as long as you have audited accounts and tax reports available for the company then it's possible.

 

[Juoffshore]

Nanoo said:
Here's more details for example 1.
Company registered using nominee director + shareholder.
I will manage the company from UK but it's a dropshipping business, no offices, wharehouse and no income come from UK.
I will use only a laptop + Cyprus vps to manage the online business.
Click to expand...

A company will be UK tax resident if it is incorporated in the UK. Additionally, for those companies not incorporated in the UK, they will be considered UK tax resident if they are centrally managed and controlled in the UK. Central management and control means the highest level of decision making and not, for example, operational control, although clearly these can go hand in hand.

So in this case if you get caught, HMRC, can challenge that your Cyrpus company could be taxed as a UK one!

 

[JohnLocke]

Juoffshore said:
So in this case if you get caught, HMRC, can challenge that your Cyrpus company could be taxed as a UK one!
Click to expand...

Just want to added, this is exactly as any other tcountry and ax office in Europe.

You need a very good and strong setup in Cyprus to avoid anyone questioning your operation.

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Disclaimer: Nothing I say should be taken as tax, legal or financial advice. Anything I say is for general informational purposes only. Always seek independent professional advice.​

 

[jackfrost]

Btw not in detail related but recent CFC ruling in one of the strictest jurisdictions in Europe:

The German Federal Tax Court Limits German CFC Rules And Anti-Abuse Provisions To Wholly Artificial Arrangements - Tax - European Union

Very nice details on what they did for "substance"