USA LLC and Cyprus non-dom. What taxes?

[D0naldDuck]

Your main issues will be (i) non-doms are not considered tax residents of Cyprus under most OECD modelled tax treaties, so other countries can claim tax residency (including Spain, based on having your economic center there) and you wont be protected by a treaty and (ii) place of effective management of the LLC; LLC is non-transparent for tax purposes in most EU member states, so if you are in Spain 5 months, Spain could claim tax residency of the LLC.

Could you, or someone else, elaborate why non-doms arent considered tax residents? I think this would probably blow up the setups of thousands of people^^

 

[gnud]

Could you, or someone else, elaborate why non-doms arent considered tax residents? I think this would probably blow up the setups of thousands of people^^

You're not a tax resident as a non-dom in a way that if the business activity, based on which you're receiving the capital gains, was occurring outside of Cyprus and you don't transmit them to Cyprus, they're not taxable in Cyprus. But if the capital gains are arising from Cyprus and you're a resident of Cyprus, they are taxable.

If you're domiciled in Cyprus (aka being born there etc), all capital gains are taxable there.

So as a non-dom you're exonerated from taxes on certain type of capital gains, even though you're otherwise a tax resident there.

 

[Sols]

Could you, or someone else, elaborate why non-doms arent considered tax residents? I think this would probably blow up the setups of thousands of people^^

Non-doms are tax resident. They are just exempt from Special Defense Contribution, which is Cyprus' equivalent to Capital Gains Tax.

I have not found seen any examples out there that match the statement by @qwerty84. The wording in the OECD model tax treaties use the word domicile in a different meaning that the one applied in Cypriot law. Under an OECD model agreement, someone who is non-domicile is effectively the same as non-resident. It's a different concept than the vague sense of "belonging" that's used with non-domicile status regimes found in for example Cyprus.

Maybe there are examples of people using the 60-day residence program for tax residence and struggling to convince a tax authority back home that they are no longer tax resident there. Such edge cases aren't representative of the system in general.

 

[gnud]

btw the same non-dom regime you can find also for example in Malta

So you have already 2 countries within the EU that you can use to optimize your taxes this way.

 

[fortunespeculator]

Wherever you run the LLC from you'll need to declare it and tax it as if it's a local company. This is the law just about anywhere, the reality may be different but can you rely on authorities not doing their job?

How long will that last? They can start processing the data at any point and apply penalties retroactively.

So he can stay in Dubai for 183 days after buying a house for 750k aed get the resident visa and pay zero tax?

 

[Fulton Abraham Sanchez]

For the LLC US side you will pay no tax but will need to file a report for the IRS for the money paid from the LLC to you.