Wealth Advisory activity is of great importance to advisory professionals. This type of service needs a structure that is able to constantly analyze and verify legislation and jurisprudence in a number of areas by providing answers to financial, tax, legal and corporate issues at both national and international levels. The professional working in Wealth Advisory must have a comprehensive strategic vision as well as being a key figure for the client to whom he is linked by a strong relationship of trust.
A proper Wealth Advisory service requires first of all a careful study of the structure of personal and corporate assets in order to provide assistance through coordinated actions which take into account several factors, not least the management of personal and corporate risks.
Business activities need a continuous and in-depth analysis as well as regular monitoring aimed at maintaining a proper management balance keeping separate corporate and personal assets.
Entrepreneurs or professionals often underestimate the aspects linked to protection, risk of bankruptcy, mismanagement, or generational passage of the company and family assets. In these areas it is essential an appropriate Wealth Advisory service which allows to plan and manage these delicate phases of business and personal life.
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Last July 14, 2017, a new bill was approved by the House of Representatives amending the Income Tax Law allowing an individual to acquire tax residency by staying at least 60 days in Cyprus in the relevant tax year. The “60 day rule”, which will become retroactively effective as from 1 January 2017, is a second test in addition to the “183 day rule” for individuals who do not spend more than 183 days in Cyprus or another jurisdiction.
The “60 day rule” intends to attract a significant number of individuals (investors, entrepreneurs, digital nomads, artists, sportsmen and other businessmen) who do not fulfill the tax residency requirements in any country. The absence of an established tax residency status may make them exposed to the tax authorities worldwide.
On the basis of the above metioned law amendement, an individual will be considered as a tax resident of Cyprus if he/she satisfies the following criteria:
- Not be a tax resident of any other State;
- Do not reside in any other State for a period exceeding 183 days;
- Maintain a permanent residential property in Cyprus (either owned or rented);
- Exercise business in Cyprus. To satisfy this condition the applicant must carry out any business in Cyprus or be employed or hold an office (director) of a company tax resident in Cyprus at any time during the year of assessment.
It must be pointed out that the current “183 day rule” applying where an individual remains in Cyprus for more than 183 days in the tax year, remains unchanged by the above amendment.
Individuals who are Cyprus tax resident under the “183 day rule” or the “60 day rule” are subject to tax in Cyprus on their worldwide income. The benefits for an individual who chooses to become Cyprus tax resident are as follows:
- Exemption from taxation on his/her worldwide dividend and ‘passive’ interest income;
- Exemption from capital gain tax deriving from the sale of securities, including shares in local or foreign companies, bonds, debentures, options etc, except in cases where the value of the shares derives from the value of immovable property in Cyprus;
- 50% discount on his/her income tax in Cyprus for 10 years in case of local hiring with an income exceeding €100.000, provided that he/she has not been a tax resident of Cyprus before the commencement of his/her employment in Cyprus;
- Income from employment carried out outside Cyprus is exempted from Cyprus income tax, provided that the employment exercised outside Cyprus exceeds 90 days per tax year.
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