Requirements of being a non tax-resident company of cyprus

[jennyholdem]

Someone told me that a non tax-resident company incorporated in Cyprus, should also be registered with the tax authorities in an other country. Otherwise there is a chance that Cyprus tax authorities will deem the company to be a tax-resident company in Cyprus even if it meets the non tax-resident company criteria of being managed and controlled outside of Cyprus. Can anyone confirm?

 

[orangeye]

Where do you read that? If it is not tax resident in Cyprus it sounds clear that it have to be tax resident somewhere else..

 

[jennyholdem]

I figured I could have a non tax-resident company in Cyprus, of which I own the shares, and then I just pay personal income tax on the dividends I get according to whatever country I live in. This is not correct?

 

[JohnLocke]

That's correct and one way to do so, but there are new rules which means, that from now on (June 2011 and at the latest of July 2011) all companies resident or non resident / Offshore in Cyprus have to be registered for tax also if they are exempted from any tax, so this will most probably answer your question. You will also want to look into a solution where you can make use of double tax treaty's that Cyprus may have with your country, that will lower the corporate tax that has to be paid and it may lower your personal income tax if managed / structured correctly.

 

[jennyholdem]

So, just to be clear. Even if my company is a Cyprus non-resident, it does not have to be registered as a resident in an other jurisdiction? Or does it?

 

[JohnLocke]

No it does not, we will take care of all this anyway. A Cyprus non resident means just that the company is controlled and managed outside of Cyprus and don't do national business.

 

[jennyholdem]

Would the provisional income tax returns (IR6), apply to Cyprus non resident companies since they are tax exempt regardless? I heard that starting 2011 all companies that expect to make a profit, must declare its estimated taxable profit for the year under assessment.

 

[JohnLocke]

Only resident companies in Cyprus are obligated to file tax, non resident / offshore companies in Cyprus don't need to do so.