Clarification of Cyprus Non-Dom for crypto

[CyprusLaw]

1. At some point you need to cash out.

2. There︀ 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 pay︁ some taxes, instead of completely avoiding paying taxes.

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

 

[Siggi]

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

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

3. You dont need︃ 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 establish︅ the Cyprus LTD and process the cashout. Why would you want the pain of a︆ Cyprus company if you are not ready to cashout yet.

4. If that happens you︇ 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 at︉ a higher rate than 15%? If Cyprus wants to be more attractive to wealthy crypto︊ individuals they should go the opposite route.

 

[CyprusLaw]

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

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

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

 

[Siggi]

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

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

 

[CyprusLaw]

1. If there is tax on crypto it︀ 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 be︂ possible, but they could come up next May and say that it applies from 1/1/2025︃ for example.

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