Skip to content

CosmoServe.com

International Business Consultants. Company formation and services worldwide
cosmoserve_new3_all.gif
Home News Frontpage News - Row 2 Cyprus Tax System - Summary of Benefits

Cyprus Tax System - Summary of Benefits

 

A. COMPANIES

Cyprus Tax Resident Companies as subject to Corporation Tax Rate at 12.5%; one of the lowest in European Union and there is no distinction between local and international companies.

  • Dividend income received from abroad is exempt (subject to conditions);
  • No Capital Gains Tax (except from the sale of immovable property situated in Cyprus);
  • No Immovable Property Taxes (abolished since 1 January 2017)
  • Taxable losses carried forward for up to 5 years;
  • Capital gains on sale of qualified securities: 100% exemption;
  • Gains relating to foreign exchange differences (forex) exempt from tax (subject to conditions)
  • No withholding tax on outward payments (Dividends-Interest-Royalties) to non-Cyprus tax residents (companies or       individuals);
  • Foreign Permanent Establishment profits exempt (subject to conditions);
  • Tax free corporate re-domiciliation permitted;
  • Possibility for establishing an SE (European Company);
  • Applicability of all EU directives;
  • Advance ruling practice exists;
  • Extensive Double Tax Treaty network;
  • Other Tax Credits and Incentives include:
  • Notional interest deduction New equity introduced to a company as of 1 January 2015 in the form of paid-up share capital or share premium may be eligible for an annual deduction for tax purposes.
  • Generous exemptions from tax of income related to Intellectual Property;
  • Exemption from capital gains tax on Cyprus immovable property acquired in the period 16 July 2015 to 31 December 2016 will be exempt from capital gains tax upon a future disposal.
B. INDIVIDUALS

Cyprus tax resident individuals are subject to tax on their worldwide income at a progressive rate, between 20% to 35%, for income above EUR 19,500.

Non-Cyprus tax resident individuals are taxed only on certain types of income accrued or derived from sources in Cyprus, at the same tax rates as Cyprus tax residents.

Non-Cyprus tax resident individuals commencing employment in Cyprus

  • Remuneration from any employment exercised in Cyprus by an individual who was not a resident of Cyprus before the commencement of the employment is subject to 20% exemption (restricted to EUR 8,550 p.a.)
  • Individuals with annual remuneration in Cyprus, above EUR 100,000 are allowed a 50% exemption for a period of 10 years if:
    • They were not residents of Cyprus before the commencement of the employment, and
    • Commence their employment as from 1 January 2012 (*exemption applies)
  • For employments commencing during or after 2012, the exemption applies for a period of 5 years starting from the tax year following the year of commencement of the employment with the last eligible tax year being 2020. 

 

 

 

 

Last updated February 2018