Tax Residency

[Vegaanders]

Hi!

This is my first post. Perhaps the answer is simple but no one seems to know.

I live in Cyprus. I work in the mining industry servicing mining equipment for different companies all over the world. I can be in different parts of the world 10 months per year. I am employed by a non-EU company.

The above means that I by normal rules can't be tax resident in Cyprus or any other EU country, even if I want to be tax resident in Cyprus. How can this be solved?

[GlobalTaxAdviser]

Hi

Typically you should pay taxes where you work. It may means your employer filing taxes for you or maybe working out a form of tax equalisation.

In some countries residence is based on habitual bode or economic interest. I think Germany and France applies those rules (though I maybe wrong). In the UK, HMRC could apply the country tie test to establish residency. I am not sure if such rules exist in Cyprus.

Though, a tax nomadic lifestyle may not give you treaty protection if you non resident.

Kind Regards

GTA

[quantia]

Hi

This is a really interesting question and even more interesting topic for discussion between tax advisors.

Speaking from our local Cyprus perspective I will add that different countries in the world have different criteria of who is "their" tax resident. The USA, Canada and UK, to name a few, are particularly picky and also having intricate rules on tax residency. Hence, if you have citizenship, property or economic connections with those countries you better check with a local tax advisor.

For the majority of the world, including Cyprus, tax residency is determined by the 183 days rule (i.e. the cumulative physical presence).
Being a tax resident brings the obligation to local income tax but also the right to apply existing DTT which very often comes handy. As you spent most of your time working outside Cyprus for a non-EU company, you are certainly not a Cyprus tax resident. It is quite possible that you are tax residentless citizen; however, this still does not free you from taxes which are typically withheld by the employer at the country where you perform you work.

Sometime ago, we tackled a similar question "Do I have to pay personal income tax".
You may find it still an interesting read http://www.qnta.biz/resources/publicati ... income-tax

If you have any further questions, feel free to visit our website www.qnta.biz or post you questions on our Facebook, LinkedIn page or Group "Cyprus Tax".

Dimiter
Quantia Advisor