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Is a non resident Cyprus co. deriving most of its income/profit from cyprus based broker taxable?

Asked in Offshore (General) for Cyprus


Is this non resident Cyprus co.(with nominee directors that are Seychelles resident/citizens) deriving most of its income/profit from CFD trading from Cyprus based broker liable to pay ANY TAX (e.g CGT, Corporation tax etc) in Cyprus?

The company will have a Cyprus address as HQ mainly for receiving post. However management decisions and control of the company will happen probably from UK (how would you avoid breaching Controlled Foreign Company legislation and other anti-avoidance legislation)?.

Cyprus Legislation Tax Seychelles
Posted by Lowtax user on Jan 14, 2013 at 23:47


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Please note the following ( for further explanations to at company formation - at 345 EURO - please email at enquiries@fbscyprus.com):

1. In Cyprus the worldwide profits of a company are taxable in Cyprus if the company is tax resident. This practically means management and control to be in Cyprus which means directors (majority) are cyprus tax residents AND BOD meetings take place in Cyprus. Operational day to day control (UK and Cy broker) do not amount to management and control. In conclusion if we have non resident directors in Seychelles and BOD meetings are held there then the company will be non resident and not taxed in Cyprus except on Cyprus source income. Maltese directors can also be used (EU directors more credible to tax authorities) as Malta does not tax then outside-of-Malta income of a Cyprus company managed from Malta- this is very popular for Cy NR cos.

2. In any case even if the co was a Cy tax resident company again the profits would be tax exempt as Cyprus exempts the profit or gain from sale of securities and derivatives of underlying securities from all taxes.

3. As far as avoiding uk cfc rules and anti-avoidance legislation we recommend the use of a Cyprus international trust to own the shares of the Cy co. Also as best practice dictates seek UK tax advice.

Contact us directly for more detailed discussions...
Posted by Lowtax User on Jan 17, 2013 at 08:59


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In accordance with tax circular 2008/13 the profit will not be subject to Cyprus Corporation tax. With regards to the mgt and control should you choose for the Co to be considered as a Cyprus tax resident, obviously CTAs will not challenge it. That been as the Co's strategic decision are probably given from the UK (not from Seychelles and Cyprus) there is no way to avoid paying tax to the UK under local CFC rules. The only way to avoid is not to disclose your CY income and hope that will go under the radar of HMIR. Obviously this is not a serious tax strategy but this is what many investors choose to do, thus the reason for BEPS. Generally i wish you all the best and Merry Christmas
Posted by Commodum Audit Limited on Dec 23, 2015 at 21:25


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