Clarification of Cyprus Non-Dom for crypto

[CyprusLaw]

Siggi said:
Yeah right.
I guess lawyers and accountants tend to make things look more complicated than they actually are.
If crypto to crypto is not being taxed thats 99% of the problems solved. The remaining 1% you mentioned is not where the pain of crypto traders is and can be solved once its time to pay out in fiat.

How come you guys are not actually spreading the word about crypto to crypto being tax free in Cyprus! This is actually huge benefit which only a few other countries have!
Click to expand...

1. At some point you need to cash out.

2. There is no formal ruling that crypto to crypto is tax free or the opposite.

3. Hence the safest approach is to take it under a company so that you pay some taxes, instead of completely avoiding paying taxes.

4. There is no guarantee that there won't be a tax circular and/or guidance after the tax reform, making crypto to crypto transactions taxable, and if that happens, those who have their assets under a company will be in a much better place than people holding them in their personal capacity

 

[Siggi]

CyprusLaw said:
1. At some point you need to cash out.

2. There is no formal ruling that crypto to crypto is tax free or the opposite.

3. Hence the safest approach is to take it under a company so that you pay some taxes, instead of completely avoiding paying taxes.

4. There is no guarantee that there won't be a tax circular and/or guidance after the tax reform, making crypto to crypto transactions taxable, and if that happens, those who have their assets under a company will be in a much better place than people holding them in their personal capacity
Click to expand...

1. Yes and at that point you can establish the Cyprus Ltd and make the capital injection with your cryptos

2. There are indeed rulings that were made by individuals with exatly this outcome. Are you not submitting ruling requests yourself?

3. You dont need to take it under the company as long as you dont plan to cash out. Once you have reached the point where you want to cash out one could establish the Cyprus LTD and process the cashout. Why would you want the pain of a Cyprus company if you are not ready to cashout yet.

4. If that happens you will still have time to esablish the Cyprus Ltd and transfer crypto to the company.

Btw. why are you assuming that after a tax reform crypto will be taxed at a higher rate than 15%? If Cyprus wants to be more attractive to wealthy crypto individuals they should go the opposite route.

 

[CyprusLaw]

Siggi said:
1. Yes and at that point you can establish the Cyprus Ltd and make the capital injection with your cryptos

2. There are indeed rulings that were made by individuals with exatly this outcome. Are you not submitting ruling requests yourself?

3. You dont need to take it under the company as long as you dont plan to cash out. Once you have reached the point where you want to cash out one could establish the Cyprus LTD and process the cashout. Why would you want the pain of a Cyprus company if you are not ready to cashout yet.

4. If that happens you will still have time to esablish the Cyprus Ltd and transfer crypto to the company.

Btw. why are you assuming that after a tax reform crypto will be taxed at a higher rate than 15%? If Cyprus wants to be more attractive to wealthy crypto individuals they should go the opposite route.
Click to expand...

Personal taxation works at bands from 20-35%, with social insurance obligations also applying in some cases depending on your activities. So I am not sure why you refer to 15%.

For point 4 you are simply assuming that there will be no retrospective effect - however remote the chance it is still a plausible chance.

Also, I would be very happy to receive one such tax ruling, as from my last communication with the tax department, no such ruling have been given. In any event, for whatever decisions you make make sure that this is backed by a professional opinion so that you are protected to some extent.

 

[Siggi]

CyprusLaw said:
Personal taxation works at bands from 20-35%, with social insurance obligations also applying in some cases depending on your activities. So I am not sure why you refer to 15%.

For point 4 you are simply assuming that there will be no retrospective effect - however remote the chance it is still a plausible chance.

Also, I would be very happy to receive one such tax ruling, as from my last communication with the tax department, no such ruling have been given. In any event, for whatever decisions you make make sure that this is backed by a professional opinion so that you are protected to some extent.
Click to expand...

I am refering to 15% because thats what roughly what you end up paying by running a cyprus ltd.
Your assumption was that you will be in a bad situation if Cyprus introduces a crypto law that states crypto to crypto is taxable. But why are you assuming they introduce a crypto law and keep the it taxed with 20-35 personal income tax?

If Cyprus taxes crypto to crypto retroactively all of the affected high net worth individuals will leave Cyprus right away. I dont think thats a smart thing to do

 

[CyprusLaw]

Siggi said:
I am refering to 15% because thats what roughly what you end up paying by running a cyprus ltd.
Your assumption was that you will be in a bad situation if Cyprus introduces a crypto law that states crypto to crypto is taxable. But why are you assuming they introduce a crypto law and keep the it taxed with 20-35 personal income tax?

If Cyprus taxes crypto to crypto retroactively all of the affected high net worth individuals will leave Cyprus right away. I dont think thats a smart thing to do
Click to expand...

1. If there is tax on crypto it will be a separate percentage for personal trading and a separate one under a company.

2. Retrospectively does not necessarily mean it will go years back - that won't be possible, but they could come up next May and say that it applies from 1/1/2025 for example.

In any event we are only making assumptions, which depends on the risk assessment you will make on your situation.