Hi folks,
I am trying to understand the tax residency rules for Cyprus companies. As I understand it, the company is tax resident in Cryprus if the majority of directors and/or shareholders are resident in Cyprus, the business is controlled in Cyprus, etc.
In my case, I am tax resident in the UK, and I would be the sole shareholder/director of the company. The company's business activities would be B2B sales of physical products in various EU countries, with a majority of sales being in Greece.
1. If I reside in the UK for the full tax year and run the business from UK, from my understanding the company would be tax resident in UK, and it would be liable for 19% profit tax in the UK on its worldwide profits. Have I understood correctly so far?
2. My only nationality is Romanian. What would happen if I split my time spent in a tax year in different countries such that I am not tax resident in any of them? For example, living for 4 months in the UK, 4 months in Romania, and 4 months in say Netherlands? Where would the Cyprus company be tax resident in this scenario? Would there be a case where the Cyprus company is not tax resident in any country, and therefore not be liable for any corporation tax in any country, essentially making it a 0% tax situation? Also, from a personal income tax perspective, considering I would technically not be considered tax resident in either of the 3 countries for that tax year, does that mean I pay no personal income tax on income from my company in the form of salary and/or dividends?
3. Similar scenario as 2, but let's say the company has 2 directors & shareholders with 50-50 equity, one in UK, one in Romania. Both directors are considered tax resident in their respective countries for the tax year. What would the tax residency of the Cyprus company be in that case? Would it be liable for corporation tax in both countries or neither? How would that work?
As I'm sure you understand from my questions, I am trying to optimize the corporate and personal income tax liabilities as much as possible. I have no problem moving around from one country to another within a tax year if it helps me save taxes legally, at least for the foreseeable future.
Thanks for the help guys, much appreciated!
I am trying to understand the tax residency rules for Cyprus companies. As I understand it, the company is tax resident in Cryprus if the majority of directors and/or shareholders are resident in Cyprus, the business is controlled in Cyprus, etc.
In my case, I am tax resident in the UK, and I would be the sole shareholder/director of the company. The company's business activities would be B2B sales of physical products in various EU countries, with a majority of sales being in Greece.
1. If I reside in the UK for the full tax year and run the business from UK, from my understanding the company would be tax resident in UK, and it would be liable for 19% profit tax in the UK on its worldwide profits. Have I understood correctly so far?
2. My only nationality is Romanian. What would happen if I split my time spent in a tax year in different countries such that I am not tax resident in any of them? For example, living for 4 months in the UK, 4 months in Romania, and 4 months in say Netherlands? Where would the Cyprus company be tax resident in this scenario? Would there be a case where the Cyprus company is not tax resident in any country, and therefore not be liable for any corporation tax in any country, essentially making it a 0% tax situation? Also, from a personal income tax perspective, considering I would technically not be considered tax resident in either of the 3 countries for that tax year, does that mean I pay no personal income tax on income from my company in the form of salary and/or dividends?
3. Similar scenario as 2, but let's say the company has 2 directors & shareholders with 50-50 equity, one in UK, one in Romania. Both directors are considered tax resident in their respective countries for the tax year. What would the tax residency of the Cyprus company be in that case? Would it be liable for corporation tax in both countries or neither? How would that work?
As I'm sure you understand from my questions, I am trying to optimize the corporate and personal income tax liabilities as much as possible. I have no problem moving around from one country to another within a tax year if it helps me save taxes legally, at least for the foreseeable future.
Thanks for the help guys, much appreciated!
