60 Day Cyprus Tax Resident Valid For Tax Treaty Benefits?

[marble123]

Granted that:

1- Ideal is to work for dispute to be prevented
2- If one is considered tax resident in Spain, CY will not fight the case

However, and correct me if I'm wrong, an individual can dispute the authorities claim over whether he/she should be considered a tax resident.

Should Spain claim an individual is a tax resident on the basis of 'centre of economic interest', my understanding of how this works is that they would need to present evidence that backs their claim (and give one the right to present their evidence before the relevant legal bodies study the case and take a decision).

Again, prevention is the best option, but just want to confirm my understanding of how the process works if prevention doesn't work.

 

[Marzio]

Should Spain claim an individual is a tax resident on the basis of 'centre of economic interest', my understanding of how this works is that they would need to present evidence that backs their claim (and give one the right to present their evidence before the relevant legal bodies study the case and take a decision).

Yes, that's correct. They have to substantiate their claims with some proofs and if you are 100% sure you don't have any link with Spain then they will not have any ground to claim your're tx resident.

 

[namelydog]

Similar situation to John (above) - Cyprus non-dom spending just over 60 days in Cyprus. Closed the chapter formally in my home country and created a company in CY, purchased a home, CY drivers license, etc.

Spending no more than 60 or so days in my home country, no family ties, no real estate investments, no debit card spending, but taking a chunky dividend from an LTD in home country (and paying a relatively small witholding tax)

Until when can your home country claim that you are a tax resident for a given year? For example, if home country has not claimed tax residence in 2021, until what year do they have to claim tax residence for 2021?

 

[Sols]

Until when can your home country claim that you are a tax resident for a given year? For example, if home country has not claimed tax residence in 2021, until what year do they have to claim tax residence for 2021?

Check the laws of your home country. If you ask Finland or Norway, it's something like three to five years. If you ask UK or Iceland, it's practically immediately.

 

[namelydog]

Thanks Sols - do you by chance know what the laws are in Spain and Portugal?

 

[Sols]

Best to check with Spanish and Portuguese tax lawyers.

You can find broad, general guidance with reputable sources such as PwC:

Spain - Individual - Residence

Detailed description of individual residence rules in Spain

taxsummaries.pwc.com

Portugal - Individual - Residence

Detailed description of individual residence rules in Portugal

taxsummaries.pwc.com

But they're not substitutes for getting personalized legal advice that takes your exact situation and details into mind.

 

[Marzio]

taking a chunky dividend from an LTD in home country

Sell your shares in the Spanish LTD to your CY company so that it will be the CY company that will receive dividends putting even more distance from you and your home country.

 

[namelydog]

Have considered this option, but I've been advised against doing this by my spanish lawyer (no good reasoning was provided by their side on this).

What would be the negative aspects (if any) of selling the shares to the CY company?

 

[Marzio]

I've been advised against doing this by my spanish lawyer

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