Cyprus has a very competitive tax system that is fully aligned with EU and international regulations.
Cyprus tax resident companies benefit from Cyprus’ extensive double taxation treaty network with a great number of countries worldwide as well as access to EU directives.
Cyprus Corporate income tax, at the competitive flat rate of 12,5%, is the main tax applicable on the income of a Cyprus tax resident company.
Cyprus enjoys an international reputation as a place for the establishment and control of international business. The favourable tax regime and the geographical position, combined with the highest quality of services are some of the key factors for its success
The sophisticated financial and business infrastructure. Internationally acclaimed entities offering legal, accounting and banking related services.
Cyprus Holding Companies are commonly used as intermediaries from International groups and entrepreneurs when investing outside of Cyprus to receive tax free dividends, to utilize beneficially the Cyprus Double tax treaty network and for disposal of overseas subsidiaries as the gains are tax exempt in Cyprus.
Foreign sourced dividends are exempt from tax under easily met conditions.
Disposals of shares are exempt from tax provided the disposed company does not hold any immovable property in Cyprus.
Generally no withholding taxes on payments from Cyprus.
Profits of a foreign Permanent Establishments (PE) are exempt from taxation in Cyprus, under easily met conditions.
Dividends to non-tax residents and non – domiciled individuals are exempt from withholding tax
Group relief provisions
No tax upon liquidation
Under Cyprus law, all expenses incurred for the production of the associated income are deducted before arriving at taxable income.
Dividends received by one Cyprus-resident company from another are exempt from all forms of tax.
Dividends and interest are exempt from Cyprus income tax and subject only to SDC in the case of domiciled tax residents.
First €19,500 of taxable income is tax exempt. Any taxable income in excess of this amount is taxed at progressive rates ranging from 20% to 35% (for incomes over €60,000).
Interest income which is the result of the main activities of the company or which is closely connected to those activities is subject only to corporation tax at a rate of 12,5%, like any other “active” trading income.
50% exemption for remuneration from employment exercised in Cyprus by persons who were resident outside Cyprus before commencement of their employment. The exemption applies for 10 years commencing from the year of employment, if such income exceeds €100,000 per year.
In case of Cypriot remuneration, which is less than €100,000, a 20% exemption is granted, up to a maximum of €8,550, for a period of 5 years commencing from the 1st January of the year following the year of employment, and until the year 2020.
100% exemption on remuneration for salaried services rendered outside Cyprus for more than 90 days in a tax year to a non-Cyprus resident employer.
Pension received in respect of past employment outside Cyprus is taxed in Cyprus at the flat rate of 5% for amounts in excess of €3,420.
100% exemption on lump sum repayments from life insurance schemes or from approved provident funds.
No Capital Gains Tax on the sale of immovable property located outside Cyprus.
No inheritance tax, no wealth tax, no gift taxation.