Taxation in Cyprus

Cyprus is a member state of the European Union since 2004 and has a strong legal and tax system, as well as extensive experience as an international business centre, with highly qualified professionals and sophisticated infrastructure. It is a country with a strategic location, long history and culture, as well as nice with almost year-round sunshine.

Cyprus offers one of the most attractive Tax Regimes in Europe. Cyprus has one of the lowest EU corporate Tax Rates at 12,5%. The island’s advantageous tax rate coupled with an extensive list of double tax treaties places it high on the list of preferred jurisdiction for international tax planners. Cyprus offers a number of personal and corporate tax incentives that aim to attract multinational companies to relocate key personnel to perform their duties from Cyprus. The tax incentives also appeal to high-net-worth individuals who are willing to relocate to Cyprus.

Access to Markets

• Full Access to European Markets
• Access to 40+ EU trade agreements
• A member of the Eurozone since 2008
• Geostrategic position
• Proximity & easy access to major markets
• Investment Grade Sovereign Rating

Attractive and Transparent Tax regime

• One of the lowest corporate tax rates in the EU at 12.5%
• An attractive double Tax Treaty network covering more than 60 countries
• Access to all EU Tax Directives
• Dividend income exemption based on relaxed conditions
• Capital gains tax exemption
• No withholding tax on outgoing dividend, interest or royalty payments
  Gains from trading in securities are tax exempt
• Notional interest deduction available for equity investment into Cypriot companies
• Foreign exchange gains or losses are tax neutral
• No tax on dividends, interest and rental income of non-domiciled individuals
• 0% succession or inheritance taxes
• No immovable property taxes
• A competitive intellectual property regime
• Tailor-made provisions for the investment funds industry
• Competitive Tonnage Tax for shipping companies and an approved EU open registry
• Tax deductions for investment into start-ups
• No exit tax rules
• 50% exemption on employment income exceeding €100.000 per annum for non-residents taking up employment in Cyprus
• No tax on dividends, interest and rental income of non-domiciled individuals.

Corporation Tax 

Corporation Tax Rate: 12,5%.

Basis of Taxation 

All companies that are tax residents of Cyprus are taxed on their income accrued or delivered from all sources in Cyprus and abroad. A non-Cyprus tax residence company is taxed on income accrued or delivered from a business activity which is carried out through a permanent establishment in Cyprus and on certain income arising from sources in Cyprus. A company is resident of Cyprus if it is managed and controlled in Cyprus.

Tax Year 

The tax year is the calendar year. The accounts of a company may be closed on a date different from 31st of December, in which case taxable profits are apportioned on a time basis relevant to tax years.