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Question Refusal of 70-90% Income Exclusive in Italy, What Netx?

A

A1988

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Dec 24, 2022
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#1
Just wanted to bring to everyones notice that my request has been refused for 70-90% exemption in Italy stating "I did not move to italy with the intention to take the 70-90% exemption of income". I was involved in Research and Development activity and finished the R&D in 2023 and moved to italy in 2019. Again, I did not make any income in this period in Italy and now when the time came for commercialization of the product I am stuck with this huge blow. I have my R & D in Italy and a business partner based in Italy, hence I moved.
My present situation is that,

1. I would like to move out of italy without creating any problems or trigerring any issue with the tax authorities.
2.I would like to move to either UK, Ireland, Malta (less preferred0 and take advantage of non dom program also I have 2 kids who would start their preschooling.
3. I would like to know if anyone knows if a structure where I pay 0-5% in corporate tax?
4. I have my business partner and R and D in Italy so daily flights would be a plus, ideally within 2hrs and not more.
5. I am expecting capital gains in the next 3-4 years.

Any suggestion or experience of the situation would be very welcome, I would want to stay in the country permanently and want my children to build their life and network in it, I am not really interested in Middle eastern countries as I have lived there and I feel its not best for my children to be exposed to that lifestyle and specially having daughters. I turn 35 in may this year.

sorry for excessive information, just wanted everyone to know that the regime can come up with any kind of excuses to refuse of accept what suits them or their objectives.
 
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#101
ExpatCyprus said:
Hi! I'm Italian and currently living in Cyprus as a non-dom. I own a small online business and the set-up is pretty simple with an LTD company incorporated here.
Taxes: 12,5% on profits, 0% on dividends plus 2,65% social insurance. If you have to pay yourself a small salary you enjoy a no-tax area up to 19,5K (you will pay social contributions though, a bit over 30% but the minimum salary is 500 Euro, so...).
There are good international schools, good food and the weather is lovely throughout the year. Decent and inexpensive health care too cause there are plenty of retired people who moved here from northern Europe.
I am in Paphos area and there are direct flights to anywhere in Italy March to October, to BGY and FCO during the "winter". It's a Ryanair 3 hours flight, cheap and effective.
The non-dom status requires that you have a place to live available all year round and spend at least 60 calendar days a year on the island. It lasts for 17 years and you can pause it should you move out of Cyprus and resume it once you are back.

I'd say this solution meets most of your requirements. Depending on where you decide to live you'll find city life, country life, beach life... there's a bit of everything and it's not a huge shock for someone used to living in Italy. Everything is close and you drive from one end of the island to the other in less than 3 hours.
The cost of living varies a lot, Limassol can get pretty expensive, while anywhere a few KM out of any city is like the south of Italy.
In my area, you could rent a modern 3 bed 2 bath villa with a private pool for 1.500-2.000 Euro, a decent 2 bed flat in a complex for 800-1.000... now many Russians are flowing in and long term rentals are going up, but it's still affordable.
As you would expect in a small island, locals are sometimes not exactly modern and open-minded, but there's a large international community. And very few Italians, which I personally like.
Well, get in touch if you want to know more, I'll happily share my personal experience.

Cheers!
Ric
Click to expand...
Hey Ric,

Can I bother you with a few questions regarding Cyprus? I am planning to move there end of the summer from Malta.

How can I reach you?

Thanks
A
 
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#102
Just spoke to 2 lawyers in spain, they are refusing to allow me to use gibralter company for beckham law, they are saying it doesnt go well with spanish tax residency. Apparently the lawyer I spoke also told me some of his clients under beckham law were audited and did something they were not supposed to. So basically, I am looking to find a structure that can benefit from beckham law whilst living in spain without trigerring any tax liability in spain.

One of the lawyers suggested to have a holding company inside spain which would hold all the interests outside spain, I could take out the money as dividends from that company without attracting any tax liability due to participation exemption.

any inputs or knowledge regarding beckham law and structure that works for beckham law will be highly appreciated. thanks
 
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#103
A1988 said:
any inputs or knowledge regarding beckham law and structure that works for beckham law will be highly appreciated.
Click to expand...

You already spoke with 2 Spanish lawyers, i don't think you will gain a better knowledge here.

How the proposed structure would work with the Spanish holding?

I mean the Spanish holding will hold shares in which company?
 
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#104
Marzio said:
You already spoke with 2 Spanish lawyers, i don't think you will gain a better knowledge here.

How the proposed structure would work with the Spanish holding?

I mean the Spanish holding will hold shares in which company?
Click to expand...
all my interests outside spain would be held with the holding company in spain, no taxes on the sale of the company or capital gain, the only problem will be taking out money from the holding to the personal account thats when taxes will be trigered unless I keep reinvesting that money.
 
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#107
You have 2 options depending on how fast you want to cash out:

1. Live in Marbella for 5 years then move to Portugal under NHR

Since you want to live in Marbella and the lawyers suggested to form a holding imho the best strategy would be to form the holding as an ETVE.

You will be the holding director and receive a salary that will allow you to live comfortably that will be taxed at whichever rate.

Keep reinvesting in the company for 5 years.

After 5 years move to Portugal under NHR and cash out

2. Move to Portugal under NHR and appoint a director for your Spanish holding

Instead of you being the holding director you'll appoint somebody else and as soon as the sale happens you can cash out everything tax free in Portugal.
 
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#108
As soon as I take the money into the holding company, spanish taxes will apply whether I live in spain or not once I decide I need to take the money out. WHT will apply in either case. That capital gain will eventually end up getting taxed. I am trying to find a way where once the IP is sold I am able to avoid that hit.

maybe I should suck it up and live in a place which has non dom tax like cyprus, malta, UK or ireland and realise the gain without any capital gains, but I dont know how these countries will apply PE rule or CFC in my particular case
 
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#109
A1988 said:
WHT will apply in either case
Click to expand...

Not for the ETVE

dQMvsm.jpg


ETVE: Entities holding foreign securities in Spain

The status of ETVE (Empresa de Tenencia de Valores Extranjeros) has made Spain one of the most attractive destinations in Europe for establishing a holding company.
www.strongabogados.com www.strongabogados.com
 
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#110
wow marzio, you are a genius. I wonder if this is the case why bother about beckham law

Marzio said:
Not for the ETVE

dQMvsm.jpg


ETVE: Entities holding foreign securities in Spain

The status of ETVE (Empresa de Tenencia de Valores Extranjeros) has made Spain one of the most attractive destinations in Europe for establishing a holding company.
www.strongabogados.com www.strongabogados.com
Click to expand...
so as I read clearly, I open this holding company in spain under beckham law, and take the money out as non resident of spain tax free under NHR in portugal if it still exists?
 
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#111
A1988 said:
wow marzio, you are a genius
Click to expand...

I wonder why PwC still didn't contact me to propose to work for them. :cool:

Uhm...i have DM disabled, that's why!

A1988 said:
I wonder if this is the case why bother about beckham law
Click to expand...

Exactly, move to Portugal, setup under NHR (while the program still exists), cash out and then do wathever you please.
 
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#114
A1988 said:
wow marzio, you are a genius. I wonder if this is the case why bother about beckham law


so as I read clearly, I open this holding company in spain under beckham law, and take the money out as non resident of spain tax free under NHR in portugal if it still exists?
Click to expand...
I think the problem will be that under beckham law, you cant have more then 25% shares of a holding...
not sure if you are using another company to relocate under beckham law and have a holding additional.

active business company with 100% shares is no problem since the recent beckham law changes. I am more or less in the same situation with a malta setup, spoke to many tax lawyers , 4 are fine with a malta company with substance + beckham law. 1 is against it. I think Malta is better then Gibraltar because of DTA and no tax heaven. Is Gibraltar still a Tax Heaven for Spain?
 
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#117
Marzio said:
There's no point in using Beckham law in his case



One reason more to settle in Portugal instead of Spain
Click to expand...
chances of exit tax and audit by hacienda is very high, they will claim changing of residence for tax evasion etc etc.

How is portugal NHR better than beckham law in my case?

uncreative said:
I think the problem will be that under beckham law, you cant have more then 25% shares of a holding...
not sure if you are using another company to relocate under beckham law and have a holding additional.

active business company with 100% shares is no problem since the recent beckham law changes. I am more or less in the same situation with a malta setup, spoke to many tax lawyers , 4 are fine with a malta company with substance + beckham law. 1 is against it. I think Malta is better then Gibraltar because of DTA and no tax heaven. Is Gibraltar still a Tax Heaven for Spain?
Click to expand...
2 lawyers confirmed Gibralter company with beckham law is not a good structure, gibralter is considered a tax haven by hacienda.
 
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#118
A1988 said:
How is portugal NHR better than beckham law in my case?
Click to expand...

Because you will be not relocating from Spain to Portugal so no exit tax audit.

You relocate directly to Portugal under NHR, form the ETVE as a non resident shareholder, appoint a director to the holding, cash out from the ETVE without withholding taxes, receive dividends tax free in Portugal under NHR.
 
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