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 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.
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.