Profits from offshore company blacklisted?

[gmbh]

Hi,

my tax accountant in Cyprus came up with the structure to set up a Belize company to do crypto trading to pay zero percent taxes.

He said I don't have to declare the profits in my tax return because they are tax free. Does anybody know if this is legal?

But apart from this I think even if the Cyprus tax authorities accept this (they probably would never notice it anyway) I doubt that I could ever reinvest or buy anything with those profits. If I want to buy a house (with bitcoin) in five years for example, I guess I have to declare the source of funds. How can I do that if the profits are not shown in my tax return? Or let's assume I made 5 million with trading after 2 years. Even if I could find a bank which accepts the money from selling bitcoin, I guess they want to see a tax return which shows that that these trading profits were taxed? If I say "I made this money with trading through my Belize company" they will probably directly call the police? ca#"!

I think it would be better to trade with a Cyprus Limited, pay 12,5% taxes and declare the profits in my tax return, so I can proof the source of funds.

What do you think about this?

 

[gmbh]

The sentence should be like this:

*If I say "I made this money with trading‌ through my Belize company so I don't had to pay any taxes, because in Belize‍ the tax rate for companies which don't do business in Belize is zero percent" they⁠ will probably directly call the police?

 

[Sols]

From my understanding, that⁤ is not correct. You need to declare it on the tax form, but it's not⁣ subject to tax. I suppose you can get away with not filling it in, since⁢ it's not taxable but I think you're supposed to declare.

Banks in Cyprus do not︆ want any involvement with crypto, so you have another problem to solve here depending on︇ the logistics of the transactions. Do the funds have to enter Cyprus or can you︈ keep them in a less crypto hostile bank?

No, you're not going to get arrested for not paying︍ enough tax. Not in Cyprus. As we discussed in the other thread, you would probably︎ only be required to pay the corporate tax plus late penalties.

As mentioned in the other thread, that's‍ usually what I would suggest. Comes with greater peace of mind.

 

[JackAlabama]

You can do a p2p deal with the seller and︉ do not have to involve the banks if you want to buy a house.

 

[Spinat]

Does Seychelles and Cyprus still have a DTA and other agreements, what I mean, in‌ the past it was tax free to move profits to AND from Cyprus and Seychelles‍ entities!

Not sure if that still apply.

 

[gmbh]

Thanks again for your︂ detailed answer. Very much appreciated!

The funds don't have to enter any bank at all︃ because I don't want to exchange Bitcoin to EUR. I trade to get more Bitcoin.︄ But of course one day I want to buy something with those Bitcoins, and I︅ worry that when this day comes and I have to exchange Bitcoin to EUR or︆ USD that I will not find any bank which accepts my Belize company. But maybe︇ in some years it's even possible to pay directly with Bitcoin.

You said in the︈ other thread:
At the moment I think︊ I will just don't show the profits from the Belize company in my tax returns︋ and never pay myself any dividends as long as I live in Cyprus (I don't︌ have to live from this money so it would be possible) and in some years︍ I move to a zero income tax destination and legally send the Bitcoins from the︎ "company wallet" to my "private wallet". When the Bitcoins are in my "private wallet", I️ guess I can find a bank (at least in places like Bahamas) which opens an‌ account for me so I can sell some Bitcoins for USD and send it to‍ my bank account. Sounds too good to be true...?

In principle I see it like⁠ you here
I could live⁢ with 12,5%, but after you, one other guy in this forum and my tax accountant︀ say that the tax authorities in Cyprus don't care where a company is "managed and︁ controlled" (at least when you have a Nominee Director) I tend to keep the Belize︂ company, pay 0% taxes, don't have to keep books and probably the Cyprus tax authorities︃ don't care and even would never notice that this company even exists. I just worry︄ that I overlooked one point that could get me in trouble... bor&%#