Cyprus crypto EUR cash out?
- Thread starter JoeBlow
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Hi, @CyprusLaw!
If the only taxable event is conversion to fiat -no idea if this point is confirmed by Tax Authorities or simply a common practice that is not completely safe-, you can trade as natural person and make profits without paying a penny, staying 183 days there taking in account with stablecoins you don`t have any risk of losing value in your portfolio as is not a taxable event. Is not a bad deal. Even you can profit from trading stocks up to 20k, witohut paying a single buck.
In that scenario of paying 0 taxes, do you see any problem to obtain the tax certificate?
As you manage good info about Cyprus, actually Crypto staking and Crypto lending profits are tax free as natural person? And under a company?
Staying 183 days there is not necessary to mantain the rental house during all the year, right?
Thanks in advance.
As I have mentioned in a previous post, this is the current position due to the absence of an amendment in the law. So you can not tax something (crypto) that is not explicitly identified in the law. In this respect at this moment the taxable event is when we have a conversion to FIAT. This could change in the future but an amendment of the law would be needed and therefore we would know well in advance of any such change.
With respect to the tax residency, both with the 60-day rule and with the 183-day rule you will need to show that you own or rent property, and if you rent the agreement's duration has to be at least for one year.
Come on, why bother with this Al Jazeera Cyprus? Possible corporate structure with fat margins for the service provider and 12,5% corporate tax? Or ambiguity of whether crypto gains are taxable or not as personal income tax”¦ The best I think would be to get residency in the UAE, wait 186 days, when you get the tax residency you transfer the funds to a newly opened Swiss account and keep the funds in a very safe environment”¦ Do you really want to keep your money in dodgy technically bankrupt Cyprus banks?
1. 'Al Jazeera Cyprus' - so Dubai is better?
2. There is absolutely no ambiguity on tax at this time, there have been tax rulings both from the tax dept and big 4 on this.
3. 'Bankrupt Cyprus banks' ? if you are referring to the 2013 haircut, things are much different now, eight years later....
Hi CyprusLaw, when I referred to Al Jazeera probably you fully new that I reminded everyone about the dodgy way of doing business in Cyprus, don't you? If you say that crypto trading (not long-term investment) is tax free then why you offer a company with 12,5% corporate tax? You resemble Liechtenstein lawyers who for the last 30 years offered Liechtenstein and only Liechtenstein as the best solution - as if nothing else exist in the world”¦
Concerning the banking system would you recommend Hellenic Bank instead of Julius Baer? The banking system on a net capital adequacy level did not manage to build up enough capital in the following 9 years to survive the fourth round of Covid or any seroius economic problems”¦ In fact the losses in the economy of the last 2 years due to Covid probably equals any profits earned between 2013-2019 so net-net it is very bad.
And I did not even mention all the crooks who get their forex trading licences in Cyprus as it was the easiest country to get”¦
And I can continue for ages”¦
Concerning the banking system would you recommend Hellenic Bank instead of Julius Baer? The banking system on a net capital adequacy level did not manage to build up enough capital in the following 9 years to survive the fourth round of Covid or any seroius economic problems”¦ In fact the losses in the economy of the last 2 years due to Covid probably equals any profits earned between 2013-2019 so net-net it is very bad.
And I did not even mention all the crooks who get their forex trading licences in Cyprus as it was the easiest country to get”¦
And I can continue for ages”¦
I will not even bother commenting - except from one point, I never said crypto trading is tax free in Cyprus, to the contrary.
no not found a solution. having spoken to some accountants/lawyers in CY there really isn't a consensus. most are pushing the corp 12.5% tax route more as a conservative option. i think i need to put boots on the ground in CY to find the best decision. the other thing is that if CY wants to be competitive with Germany and Portugal for example they cant just say its normal income, or even 12.5% tax otherwise people like me will just not do it and just go to Portugal etc. imo they should use this as an opportunity to say max 5% cap gains or sth like this and get people to invest this money within CY. so i am hoping the regulations that are coming will be more favorable than the 12.5%. banks will also need to accept that funds from crypto aren't "black listed". this is backward thinking and again uncompetitive and counterintuitive. it only takes 1 or 2 EU countries to brake ranks and this kind of hard line will mean nothing.
anyways i am not worried i think fiat is overrated. i would be happy to stay in crypto especially if EU/CY doesn't give some solid and forward thinking regulations that i can get behind.
anyways i am not worried i think fiat is overrated. i would be happy to stay in crypto especially if EU/CY doesn't give some solid and forward thinking regulations that i can get behind.
They don't need to be crooks. Personally I know a company from UAE who is trustworthy and has been in business more than 10 years after all.
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OP please vote for the answer that help you with your question, that's how a "question thread" works 😉
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Is the below possible in Cyprus?
1 - Set up a Cyprus company (ABC Co.) and loan your crypto to ABC Co. at market interest rates.
2- Then borrow from (ABC Co) also at market interest rates deferring the interest payments.
In theory this would reduce ABC Co's income and thus the tax burden when selling the crypto to repay the loan. But more than this the secondary question is what is the basis for the original loan to ABC Co? Does the transferors original basis carry to ABC or does the crypto get revalued as of the date of the loan?
Further, is the loan to and from ABC Co a taxable event in any way?
1 - Set up a Cyprus company (ABC Co.) and loan your crypto to ABC Co. at market interest rates.
2- Then borrow from (ABC Co) also at market interest rates deferring the interest payments.
In theory this would reduce ABC Co's income and thus the tax burden when selling the crypto to repay the loan. But more than this the secondary question is what is the basis for the original loan to ABC Co? Does the transferors original basis carry to ABC or does the crypto get revalued as of the date of the loan?
Further, is the loan to and from ABC Co a taxable event in any way?
Is it possible? Yes.
Is it a good idea? Nope, unless you want to break a couple of laws, in which case there are smoother options.
Hey Willblack thanks for the reply.
Can you be more specific as to what laws this is breaking. Its just like a BlockFi, Nexo or Celsius. And ABC Co could also be a Trust maybe? Just trying to think outside of the box.
Injecting capital in the new Cyprus company in the form of debt has its benefits in that the Company's taxable income will be reduced by the interest expense you will deduct arising from the loan.
However, repayment of the loan will have no impact on taxation and corporation tax will arise on any gains from crypto trading.
To answer your second question:
assuming the loan provided to the company will be denominated in euros and will be granted using crypto assets in their euro equivalent at the date of the agreement, then the repayment will be again in the euro equivalent at the date of repayment. Thus again there will be no tax impact on granting and repayment of the loan.
Please bear in mind that entering into a loan agreement with the company may have personal inclme tax impact as the interest from the loan shall be declared on your personal tax return.
Last edited by a moderator: Sep 25, 2021
I've been thinking about moving to Cyprus and trade crypto-to-crypto as a natural person (I'm not in a hurry to cash out fiat currency) but then I found out that an EU citizen needs the yellow slip to live more than 90 days in Cyprus: @CyprusLaw can an EU citizen without a job but who has the financial means to pay the rent, bills and health insurance get the yellow slip?
Last edited: Nov 8, 2021
You can, you need to evidence sufficient funds to live in Cyprus and also have health insurance in Cyprus
Hi,
The current applicable tax treatment on crypto gains in Cyprus, in the absence of a specific legislation is to look at the "batches of trade" to identify whether your income is trading income or capital gains. Below are the basic considerations
- Whether you have a profit seeking motive ( trading)
- NUmber of transactions
- THe nature of assets
- Existence of similar trading transactions or interests
- Changes to the asset
- The way the sale was carried out
- The source of finance
- Interval of time between purchase and sale
- Method of acquisition
To put it simply, id you tranaactions can be identified as trading then you will be subject to corporate tax but if they are regarded as capital gains ( i.e. more of an investment nature transaction) then no capital gains apply as the legislation is affirmative to the fact that capital gains only apply at the sale of immovable property situated in Cyprus or shares of cos holding immovable property in Cyprus.
Hope this helps
What are the tax implications of a capital contribution in the form of crypto?
Will the crypto be considered sold, at the date of injection?
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