From Sweden to Cyprus. What is the most Tax optimisation setup?

[Dienekes]

Hello everyone,

I would love to get you guys opinion on my case:

- I live in Sweden where my family is and where we bought our home. According to Swedish tax law, that makes me a tax resident of Sweden no matter where I go into the world.
- I am planning to spend less than 6 months in Sweden and relocate to Cyprus and open my own company where I can consult for my current company which is from EU but has no tie to Sweden
- I am all for paying taxes, but I would love to optimize my setup.

What I would like to know is if anyone understands how the tax system would work between the 2 countries for such a case like me? For example, Being a Sweden tax payer living less than 6 months in Sweden gets me a tax rate of 25% of I am not wrong. Now, I would probably pay myself a low salary + dividends. Since CIT in Cyprus is 12.5%, would I pay 12.5 in Cyprus and the remaining 12.5 in Sweden? Would the dividend be taxes as well? since in Cyprus, it's 0%?

I would appreciate any lights on this topic.

Thanks!

 

[CyprusLawyer101]

Normally, if you change your tax residency from Sweden to Cyprus you will no longer be subject to Sweden's tax laws, therefore the 25% you are making reference to, should not apply. You will only be subject to Cyprus tax laws, both on the corporate level as well as on the personal level when recieving dividends and salary. What is important though is to ensure that you have properly terminated your tax residency in Sweden; just spending less than 183 days in Sweden while it remains your centre of vital interests would likely not amount to the end of your tax residency there.

 

[Dienekes]

thanks for this!

the only thing i am not too sure about is that according to Swedish law, If I have close ties to Sweden (like owning a house or having a family), I might still get considered a swedish resident. Now, I lived less than 10 years in Sweden so I m not sure if what I mentioned in the first sentence still apply to me since I m not a Swedish Citizen.

 

[CyprusLawyer101]

The facts that you are not a Swedish citizen and stayed in Sweden for less than 10 years would generally act in favor of terminating Sweden's taxing rights once you become tax resident elsewhere, however do make sure you evaluate local tax matters closer before safely concluding.

 

[Dienekes]

I will definitely consult a local tax advisor for confirmation.

Thank you so much for taking some time on a weekend to answer me