Bank account with utility bill from EU and Canadian passport?

[Edi Diba]

Hello,
Can anyone tell me if you open a bank account in Cyprus for a Seychelles IBC with a Canadian passport but an EU address/utility bill will you get reported to both, one or none? Basically I am resident in EU, dual citizenship with a Canadian passport (non-resident there so no tax required).

I have no problem if they report to Canada as non-residents don't own any income tax but with EU and CRS it is a different story.

Thanks for your help,
Ed

 

[Martin Everson]

You will get reported to your EU country. CRS reporting at this stage is based‌ on residency and not nationality like FATCA.

 

[Edi Diba]

Thank you Martin. So a "dark" utility bill from Canada might work then?

 

[Martin Everson]

This is interesting scenario. If you give Canadian residency information and you are not tax‌ resident in Canada the authorities in Canada will simply throw the information away. It would‍ work as long as the Canadian authorities do not know which country you moved too.⁠

 

[Edi Diba]

So even if your bank account is for the Seychelles IBC they will report all‌ the transactions as personal income for the owner/person who opened the account?

 

[Martin Everson]

They will report for the Seychelles company account the following if the persons countries are‌ part of AEOI/CRS :

- Directors
- Shareholders
- Signatories
- Ultimate beneficial owners

 

[Edi Diba]

Thanks again for your expertise Martin, I really appreciate it. Here is one more question‌ related to reporting: the way I understand it the bank reports the ownership (so you‍ are not anonymous anymore) but no other financial information so basically the tax man can⁠ ask about your ownership but they won't know any transactions you might have performed right?⁤ How will they audit you, making an official request to the Cyprus bank for the⁣ statements?
Ed

 

[Martin Everson]

Individual transactions are not reported. It is for the taxman receiving the data to follow‌ up with the sending state. This is done via official channels such as a formal‍ DTA (Double Taxation Agreement) request to the Cyprus tax authority. At this point your bank⁠ may inform you of what is happening. The information requested will normally then be statements⁤ of capital gains and losses, statement of interest paid, total inflow of money, total outflow⁣ of money and ownership of securities, insurance policies or other assets held with the bank.⁢ Unless there is reason to believe the proceeds of the undeclared money was from criminal︀ activity then they would focus solely on requesting information allowing them to calculate the uncollected︁ tax. Add to that fines, interest etc and perhaps jail time their job is finished︂ and they move to next case.

If however the information leads them to find criminal︃ activity or assets transferred to other accounts, purchase or art, boats etc etc. The case︄ becomes a more serious money laundering case as opposed to tax evasion and it is︅ then a police matter.

 

[Edi Diba]

You have an amazing knowledge Martin, just for the replies like yours the Mentor Group‌ access fee is worth it ! Thanks again.

Another follow-up 🙂 So if you don't take‍ any money out as dividends to personal account for a couple of years and the⁠ IBC is registered in a zero tax jurisdiction the tax man can't really do anything⁤ legal as you have not earned anything yet just the IBC has some profits in⁣ the books (and funds in the account) right?