Best Bitcoin Card for Cyprus
We receive more and more inquiries from people who are currently earning their money with crypto currencies or crypto mining and want to know the tax treatment on this topic in Cyprus.
The topic is not new for us and many German-speaking emigrants have already realized their crypto business in Cyprus. Nevertheless, one sometimes has the impression that this topic has not yet arrived in all the heads of Cypriot tax officials. There is probably also therefore a lot of wrong or outdated information about this on the net.
Basics: If your residence is in Cyprus, you have successfully completed the immigration (permanent residence permit) here and are subsequently in possession of a Cypriot tax number as well as the NonDom status, then for a total of 17 years after immigration, for example, all dividends and interest income from home and abroad are tax-free for you. However, if you realise your income mainly through crypto-trading activities, this income is also taxable in Cyprus.
You now have three legal ways to tax your trading income in Cyprus.
- 1. you can tax your income from crypto trading transactions as an independent individual. You will then be taxed according to the employee tax table (up to 19500 € annual income is tax free), but you will have to pay social security contributions of 14.6% on your income (also on the tax free amount).
- 2. you establish a Cyprus LTD and the LTD then pays 12.5% tax on the profits of the LTD. Private withdrawals can be made to you as the owner of the LTD tax and social security free through dividend payments.
- 3. you establish a dividend company through an offshore company (e.g. Belize) and you operate completely tax free. Also here the private withdrawals are realized by tax-free and social tax-free dividend payments.
Our recommendation: Whenever you conduct international business activities in addition to your trading activities, a Cyprus Ltd. or a combination of a Cyprus LTD and an offshore company is certainly the best choice.
However, if your income is derived exclusively from trading income (e.g. crypto currencies, bitcoin mining, etc.), an offshore company is certainly the better choice as it is completely tax free. You are thus also protected against any future EU-wide legal changes regarding the taxation of crypto profits.
Cyprus is with the main mass of the country part of a larger island. The island state lies in the eastern Mediterranean Sea. The country has a total area of 9,250 km² and a total coastline of 648 km. This area is about 3.6 times the size of the Saarland. Cyprus is therefore one of the smallest countries in Asia and ranks 170th worldwide in terms of area.
The archipelago consists of about 10 islands. Turkey is the only directly bordering neighbouring country of Cyprus. The distance between Berlin and the capital Nicosia is about 2,490 km.
Cyprus has a subtropical climate, so it is much drier and warmer than here. Only in a few wetter months of the year there are heavy rain showers. The average daily maximum temperatures are between 17 and 34 degrees, depending on the season. In the colder months, the temperature drops at night to up to 8°C in the monthly average.