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Taxation

Taxation Information

Cyprus companies are liable to corporation tax at the reduced rate of 12.5%. In case the management and control of the company is not exercised in Cyprus the tax rate could be 0%.

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Taxation of a Cyprus Company

Cyprus is considered a primary international business center amongst 50 countries, offering an ideal entrepreneurial environment and supporting facilities. The private limited company called International Business Company (IBC) is the most common type of company used by non-residents for international business activities.

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Corporate Tax Rates

In Cyprus, the Corporate income tax rate is 12.5%. All expenses incurred wholly and exclusively for the production of income for the business are considered tax-deductible expenses.

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Special Contribution for Defence

A Special contribution for defence is imposed on certain types of income. Non-residents are exempt from special contribution for defence. Dividends received from a resident or non-resident companies are subject to special defence contribution at 17%.

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Tax Rates for Individuals

When an individual is a resident in the Republic of Cyprus, tax is imposed on income accruing or arising from sources both within and outside the Republic. Where an individual is not resident in the Republic, tax is imposed on income accruing or arising only from sources within the Republic.

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Double Tax Treaties

Cyprus has an extensive network of Treaties (Double Tax Treaties) for the avoidance of Double Taxation with over 60 countries including the US, Russian, Ukraine, India, and China.

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Company Re-Organizations

Our Expert team of auditors, accountants and consultants can assist and advice on your company re-organization.

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Shipping Companies

No tax is payable on the profits from the operation of a vessel registered in Cyprus or on the dividends received from a ship owning company flying the Cyprus flag and operating in international waters.

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Insurance Companies

Information about Insurance Companies Losses of the life business can be offset against profits of the general business Losses of the life business can be offset against profits from other sources Losses of the life business can be carried forward indefinitely. More information about taxation, insurance and corporate structures, visit our services page.

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Foreign Pensions

The pension income of any individual residing in the Republic, which arises from services rendered abroad, is taxed at a rate of 5% for amounts exceeding €3.420 per annum or Normal rates.

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Intellectual Property Rights

The gross income arising from intellectual property rights, other exploitation rights, compensations or other similar income arising from sources within the Republic of Cyprus, of a person who is not resident in the Republic, is subject to withholding tax at a rate of 10%.

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Film Royalties

The gross income derived by a non-resident person in respect of royalties arising from film projection in the Republic is subject to withholding tax at a rate of 5%.

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Value Added Tax (VAT)

Value Added Tax was introduced in Cyprus on 1 July 1992 and is imposed on the provision of goods and services as well as on the importation of goods into Cyprus. We can assist your company in filings with the tax department and more.

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Capital Gains Tax

Capital Gains Tax is imposed on gains from the disposal of immovable property situated in the Republic including shares of companies not listed on a recognized Stock Exchange which own immovable property situated in the Republic, at the rate of 20%.

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Immovable Property Tax

The immovable property tax is payable on 30 September each year and is imposed on the market value of the immovable property. Applicable Rates for Cyprus.

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Special Levy Tax

As from 2011 an annual levy of €350 payable to the Registrar of companies is introduced for all companies incorporated in Cyprus. For groups of companies, the maximum levy is fixed at €20.000.

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2019 Tax Diary

Learn more about all the deadlines and submission dates regarding taxation, corporate tax, VAT and many more. This schedule will help you file the necessary documentation in time and avoid late submission penalties and other issues.

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