Need advice unsuspending Wise account

[5K1PP3R]

I have a Russian passport but recently changed the residency to Cyprus. After the war started Wisе started to ask questions about ALL the incomes on 2021. I submitted most of the docs, mostly I had dividends, but at the beginning of the year I did get some payments from my client's company. Tbh I was going to forget about them as I did in previous years. But suddenly Wisе wants to get the docs for them.
I have two choices now:
1. Submit a royalties contract. The drawback is I may have to declare them in Cyprus and pay 30% incomе tax. If I don't declare, Wise may request a tax declaration for 2021 one day and discover those amounts are missing. I am not sure what is the probability of that scenario?
2. Submit a loan contract. I can invent a reasonable story that the client was lending me money to create a software and license it back via Cyprus company. The advantage is I won't need to declare it and may be pay back one day or forget about it. But what will Wisе say if I tell them I borrowed 200k from another company? Will this raise red flags?

 

[Sols]

So you received money from a company without any paperwork in place? Is there no agreement or invoice you can show them? I don't understand how some people do business and don't even do the barest minimum paperwork.

Easiest would be to classify the transaction as payment for services provided, and make pay tax on it. If you did it as yourself as a natural person, add it to your next tax return and consider the taxes payment for a lesson learned the hard way.

If you didn't want to pay personal income tax for it, you should've set up a company in advance and structured the payment as a B2B invoice payment. Then tax would've been 12.50%.

As a Russian national, you should expect to be subject to excruciating due diligence now and for the foreseeable future. Banks and EMIs don't make enough money on the average client to be worth the risk of sanctions-related penalties. Make sure all your transactions can be explained and proven with supporting documents.

Claiming it's a loan may trigger due diligence checks on the lender, in which case they'll want to know who the lender is, how they came earn that money, what the loan is for, repayment terms, and so on.