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Crypto taxation in Cyprus

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Medcalf2702

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Nov 3, 2023
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#1
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I live in Cyprus and have some questions regarding taxation of crypto and Fiat transfer from banks to exchanges.

Can someone here confirm that crypto to crypto transaction is not a taxable event here in in Cyprus?

I spoke also with an accountant that said another possibility is to buy crypto using CFD because then you are not owning the crypto but someone is buying on your behalf. And then no capital gain tax.

Would also like to know if anyone has any experience of sending large amount of fiat in and out of exchanges to bank accounts from Cyprus or another country. What is the best way to do this? I have experienced a lot of diffficulties regarding this.
 
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#2
Sending fiat from exchanhes to Cyptus banks is almost impossible.
Also what yout accountamt is saying is probably wrong. CfD's are not taxable subject to the underlying asset being part of a pre - determined list of financial instruments and crypto/bitcoin is not. So normally there is a risk of taxation there.
 
#3
Medcalf2702 said:
I live in Cyprus and have some questions regarding taxation of crypto and Fiat transfer from banks to exchanges.

Can someone here confirm that crypto to crypto transaction is not a taxable event here in in Cyprus?
Click to expand...

Crypto is NOT included in the list of assets the law stipulates (I cant remember which year the law is from but kinda old), however most people treat them the same as stocks in the tax reporting and so far the rev department hasnt said anything.

Not saying its legal, just saying this is how things are currently playing.

Medcalf2702 said:
I spoke also with an accountant that said another possibility is to buy crypto using CFD because then you are not owning the crypto but someone is buying on your behalf. And then no capital gain tax.
Click to expand...

Unnecessary imo but I'm not a Cyprus lawyer (nor accountant)

Medcalf2702 said:
Would also like to know if anyone has any experience of sending large amount of fiat in and out of exchanges to bank accounts from Cyprus or another country.
Click to expand...

As far as I know, no bank in Cyprus allows this flow type.

Medcalf2702 said:
What is the best way to do this? I have experienced a lot of diffficulties regarding this.
Click to expand...

Off-ramp the crypto outside of Cyprus, then move the money to Cyprus.
 
#4
Thank you for the replies, really appreciate it.

So most people just report it as stocks? Has anybody here had difficulties with that?

I have moved to cyprus from another country and i have to report all my assets and earnings to them for 3 more years.
They have a double tax treaty agreement so i can follow cyprus rules. It is not possible for me to report it as stocks.
 
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#5
Medcalf2702 said:
Thank you for the replies, really appreciate it.

So most people just report it as stocks? Has anybody here had difficulties with that?

I have moved to cyprus from another country and i have to report all my assets and earnings to them for 3 more years.
They have a double tax treaty agreement so i can follow cyprus rules. It is not possible for me to report it as stocks.
Click to expand...
Hi,

Banks in Cyprus will not accept the funds (bar some exceptions), there are EMIs of course both in Cyprus and abroad and also banks abroad that are crypto friendly and for which we could assist. Happy to send a PM for this.
 
#7
There are no laws or better to say no regulation regarding crypto in Cyprus.
It's in a total grey area and every accountant and lawyer has different opinions which are not backed by the law.

But what is for sure is that crypto CAN NOT be handled equivalent to stocks (they are simply no stocks).

I know from various companies who deal with crypto professionally in Cyprus that they see earnings from crypto as profit. To be on the safe side they tax profits from crypto with 12.5% corporate tax to have a record of paid taxes on them. If you apply the same logic to a private person then crypto is taxable like personal income which means up to 35% income tax.

So this leaves us with two options:
  • So the people who play it safe use crypto only in companies in Cyprus and pay 12.5% corporate tax on it.
  • All other people simply do not declare crypto (but no legal backing). They all hope that when crypto laws are finally happening that they are not enforced retroactively. There has been draft crypto laws in the last Cyprus governments but it seems Cyprus is too fearful going forward with its own crypto laws without legal backing and support from EU, European central bank, Cyprus central bank etc etc. (many parties involved as you see)
Two other solutions to the problem:
  • If you take crypto seriously you do crypto with with an offshore company (with substance) in a country with well defined crypto laws (UAE&Dubai is a famous example) and not in Cyprus.
  • Or you should not be a Cyprus tax resident if you want to do crypto privately.
 
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#8
curiousmarv said:
There are no laws or better to say no regulation regarding crypto in Cyprus.
It's in a total grey area and every accountant and lawyer has different opinions which are not backed by the law.

But what is for sure is that crypto CAN NOT be handled equivalent to stocks (they are simply no stocks).

I know from various companies who deal with crypto professionally in Cyprus that they see earnings from crypto as profit. To be on the safe side they tax profits from crypto with 12.5% corporate tax to have a record of paid taxes on them. If you apply the same logic to a private person then crypto is taxable like personal income which means up to 35% income tax.

So this leaves us with two options:
  • So the people who play it safe use crypto only in companies in Cyprus and pay 12.5% corporate tax on it.
  • All other people simply do not declare crypto (but no legal backing). They all hope that when crypto laws are finally happening that they are not enforced retroactively. There has been draft crypto laws in the last Cyprus governments but it seems Cyprus is too fearful going forward with its own crypto laws without legal backing and support from EU, European central bank, Cyprus central bank etc etc. (many parties involved as you see)
Two other solutions to the problem:
  • If you take crypto seriously you do crypto with with an offshore company (with substance) in a country with well defined crypto laws (UAE&Dubai is a famous example) and not in Cyprus.
  • Or you should not be a Cyprus tax resident if you want to do crypto privately.
Click to expand...

As crypto is not regulated then swapping between cryptos don't generate tax events (it's been said several times on this forum and got confirmation by a Cypriot accountant), wouldn't it be a good option trying to privately increase one's crypto capital swapping cryptos on decentralized exchanges and open a company to cash out when the bull market comes?
 
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#9
You can swap to USDT on centralized exchanges also.

I got different opinions from accountants, some say you can swap from crypto to crypto and this will not be a taxable event. Others say you can buy coins using CFD, but i think the safest way will be to buy your coins private and then transfer them to you’re company and sell from there if you have any significant gain.
 
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#11
Medcalf2702 said:
You can swap to USDT on centralized exchanges also.

I got different opinions from accountants, some say you can swap from crypto to crypto and this will not be a taxable event. Others say you can buy coins using CFD, but i think the safest way will be to buy your coins private and then transfer them to you’re company and sell from there if you have any significant gain.
Click to expand...

Couldn't the transfer of crypto to a new company be considered as tax event in Cyprus?

Thomas67 said:
Couldn't the transfer of crypto to a new company be considered as tax event in Cyprus?
Click to expand...
Ok, has been answered in another thread.
 
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#12
Medcalf2702 said:
I live in Cyprus and have some questions regarding taxation of crypto and Fiat transfer from banks to exchanges.

Can someone here confirm that crypto to crypto transaction is not a taxable event here in in Cyprus?

I spoke also with an accountant that said another possibility is to buy crypto using CFD because then you are not owning the crypto but someone is buying on your behalf. And then no capital gain tax.

Would also like to know if anyone has any experience of sending large amount of fiat in and out of exchanges to bank accounts from Cyprus or another country. What is the best way to do this? I have experienced a lot of diffficulties regarding this.
Click to expand...

Did you find a solution in the meantime or how are you declaring your crypto profits in Cyprus?
 
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#13
TheCryptoAnt said:
Crypto is NOT included in the list of assets the law stipulates (I cant remember which year the law is from but kinda old), however most people treat them the same as stocks in the tax reporting and so far the rev department hasnt said anything.

Not saying its legal, just saying this is how things are currently playing.
Click to expand...
If in practice most accountants treat crypto like stocks and ETFs, does this mean that with non-dom status you can cash out crypto in Cyprus without paying the 17% Special Contribution Tax, only paying GESY, which is capped?
 
#14
CyprusLawyer101 said:
Sending fiat from exchanhes to Cyptus banks is almost impossible.
Also what yout accountamt is saying is probably wrong. CfD's are not taxable subject to the underlying asset being part of a pre - determined list of financial instruments and crypto/bitcoin is not. So normally there is a risk of taxation there.
Click to expand...
So you better send them from exchange to say Wise and then to the Cyprus bank ?
 
#15
Matade said:
If in practice most accountants treat crypto like stocks and ETFs, does this mean that with non-dom status you can cash out crypto in Cyprus without paying the 17% Special Contribution Tax, only paying GESY, which is capped?
Click to expand...
Why would they consider crypto (to fiat) as stocks and ETFs? Could also depend on the nature of the operations (investing vs trading)
I guess accountants don't hold any responsibility in terms of tax filings either...
 
#16
lavel said:
So you better send them from exchange to say Wise and then to the Cyprus bank ?
Click to expand...
Obviously transferring through a normal EMI/Bank before reaching Cyprus helps, however you still have to satisfy the source of funds question. If those are large amounts you could consider structuring to re-characterize the income into something else, like dividends etc.
 
#19
Are there still no Cyprus banks accepting the reality of cryptos?
 
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