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Question Germans to Cyprus

RealDude

RealDude

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Dec 30, 2021
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#1
@CyprusLaw , @CyprusLawyer101
My wife is working for a big german company. I want to emigrate from Germany, she will continue to live and work in Germany. If I move to Cyprus, deregister completely in Germany, and work there as a freelancer, what impact will this have on the German tax office due to our status as a married couple?
 
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#2
RealDude said:
@CyprusLaw , @CyprusLawyer101
My wife is working for a big german company. I want to emigrate from Germany, she will continue to live and work in Germany. If I move to Cyprus, deregister completely in Germany, and work there as a freelancer, what impact will this have on the German tax office due to our status as a married couple?
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Unfortunately I can only comment on the Cyprus perspective, therefore you would need a German tax advisor on this matter.

From a Cyprus perspective, as long as you satisfy the tax residency requirements you will be a Cyprus tax resident.
 
#3
RealDude said:
@CyprusLaw , @CyprusLawyer101
My wife is working for a big german company. I want to emigrate from Germany, she will continue to live and work in Germany. If I move to Cyprus, deregister completely in Germany, and work there as a freelancer, what impact will this have on the German tax office due to our status as a married couple?
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I agree, to answer this you need German tax advice
 
#5
marzio said:
Tax office will laugh at you and say that you are still a German resident because your center of personal interests is Germany.

Even if you will live 365 a year in Cyprus.
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That's what everyone on the Internet says. But how does it look in concrete terms, is it really like that? You won't find any concrete examples on the Internet.
 
#7
marzio said:
Everyone says that because it's true! Germany has a very aggressive tax administration, you have to cut ALL your ties with Germany otherwise they will consider you tax resident there.

Do you live near any German border?
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I live in the middle of Germany.
How about the DTA between Germany and Cyprus as a rescue?
 
#8
RealDude said:
How about the DTA between Germany and Cyprus as a rescue?
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It will surely help to get tax credit in Germany for the taxes you paid in Cyprys but i fear this will not save you from fines because you haven't declared taxes in Germany. Fines could be outrageous.

You either ask your wife for divorce or accept German taxes.

There's really no way out with a strong tie like family partner in Germany.
 
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#10
You will very likely be considered German tax resident just by having a residence available. Things are really that strict under German law.

Assuming Cyprus and Germany have a pretty standard model DTAA, you could try to argue that Cyprus is where you should pay tax if Cyprus is your center of vital interest (by having a local company, place of residence, and paying tax in Cyprus) and because Cyprus is your primary place of abode.

Speak with a German tax adviser/lawyer about this. Under Cypriot law, it's pretty straight forward. You can easily become tax resident there and become a non-domiciled resident right away. Germany likes to complicate things.
 
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#14
What you can do is check previous law suits between the tax authorities and individuals regarding this in your country. I don't know if there is a public database in Germany where court decisions get published.
 
#15
It is a very clear case and I agree with previous comments. In this scenario you will still be considered a German tax resident for your worldwide income.

If you setup a LTD in Cyprus it is a different scenario and at least on the company level you can take advantage of the lower taxation in Cyprus as long as you keep a few rules in mind. Anyway on a personal level you will still be German tax resident.
 
#17
RealDude said:
If I pay myself as managing director of an LTD in Cyprus an annual salary of 19500,-€ "PIT tax free", does this have to be taxed again (PIT) in Germany?
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if they will claim you are german rersident you will also high probably pay cooperate taxes in germany even your company is registered in cyprus.
 
#18
Sols said:
You will very likely be considered German tax resident just by having a residence available. Things are really that strict under German law.
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Elsewhere in Europe that's only true if your property isn't encumbered in other ways. For example if you rent your home out for an extended period of time, I don't see how legally it can be considered your residence.
 
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#19
@complex I tend to agree with ehat you are saying . It appears that if you rent your home in Germany when you leave the country then it does not qualify as your habitual adobe, i.e. place of usual residency. If you also work abroad ( centre of vital interest) then I dont see how you could be considered as a german tax resident to start with and withiut even the need to look into the Treaties. Of course if you have a wife staying at owned home in Germany, like @RealDude , then Germany may still claim taxing rights over you. Eould be interesting to see what the German tax professional comments on this case.
 
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