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Why do business in Cyprus?

The safe and sound option

The Corporate Tax System in Cyprus

Cyprus has one of the most attractive tax regimes. In addition to being fully compliant with EU and International regulations, the tax system in Cyprus attributes its worldwide recognition to its large network of double tax treaties with more than 50 countries. Furthermore Cyprus’s association to the OECD guarantees its adherence to the internationally agreed tax standards. Other advantages include the fact that the Cyprus corporation tax is at the favourable flat rate of 12,5%, which is among the lowest in the EU. Also, significant fiscal benefits exist for IP, royalties, dividends and interests and many more, all of which allow foreign investors to gain a competitive advantage on their overseas ventures.

The following Business activities are ideally suited to the Cyprus tax environment and  include:

  • Holding companies
  • Finance companies
  • IP companies
  • Investment Funds
  • Trading/Value-Chain-Transformation companies
Cyprus Corporate income tax, is at the competitive flat rate of 12,5%, this is the main tax applicable on the income of a Cyprus tax resident company.

Highlights

  •  Foreign sourced dividends are exempt from tax under easily met conditions.
  •  Disposals of shares and other qualifying titles (such as corporate bonds) 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.
  • The Cyprus IP tax regime can be utilized to achieve an effective tax rate of low 2,5% or even lower.

 

12,5 %

Cyprus maintains a competitive corporate tax rate of 12.5% which is one of the lowest among the EU countries

Dividends

Foreign sourced dividends are generally exempt from tax in Cyprus,when received by a Cypriot tax resident companies

53

Cyprus has an extensive network of double taxation agreements with more than 53 countries

Cyprus Legal System

The Republic of Cyprus is a Member State of the European Union and a member of the Eurozone. Cyprus is an independent, sovereign Republic with a presidential system of government and a written constitution which safeguards the rule of law, political stability, human rights and the ownership of property. Cyprus is a member of the British Commonwealth, Council of Europe, IMF, UN, World Bank and WTO and is signatory to many international conventions and treaties. Cyprus legislation is fully compliant with European Union legislation. European Union Directives are fully implemented into local legislation and European Union Regulations have direct effect and application in Cyprus

Financial Reporting Considerations 

Reporting framework for Cyprus entities

International Financial Reporting Standards as adopted by the European Union  (“EU IFRS”) constitutes local Generally Accepted Accounting Principles (“GAAP”) in  Cyprus and also forms the basis for the computation of taxable income for all Cyprus tax resident entities. Therefore, Cyprus registered entities need only maintain one set of financial information for financial reporting and tax purposes alike, based on a reporting framework widely accepted by investors, financiers and analysts across the globe.

 For more information on the above issues please contact us

 

Our Aim

Our aim is to provide you with the right, fresh ideas  with round-the-clock personal  approach, attention to every detail, clear response to problems and anticipation of developments before they arise.

Contact Us

16, Annis Komninis, P.O.Box 21480,    1060, Nicosia, Cyprus info@aggeorghiou.com.cy
Tel:+357-22769100  
Fax:+357-22769101

 

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