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Taxation

Taxation Information

Under the new tax regime that came into force on the 1 January 2003 all companies will be considered resident and taxed in Cyprus if their management and control is exercised from Cyprus. Cyprus companies are liable to corporation tax at the reduced rate of 12.5%. In case the management and control of the company...

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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. The following categories of IBC’s are currently operating on the island: Royalty, advertising...

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Corporate Tax Rates

Tax rate The Corporate income tax rate is 12.5%. Exemptions from corporation tax Dividend income Interest Income that does arise from ordinary activities or is closely connected to the ordinary activities of the company Profit from the disposal of securities. Deductions All expenses incurred wholly and exclusively for the production of income of the business...

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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. Exemptions: Dividends received by a Cyprus tax resident company from a non-resident company will be subject to special contribution for defence if the  non-resident company   paying  the  dividend  engages directly  or indirectly more than 50%...

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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. An individual is considered to...

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Double Tax Treaties

Cyprus has an extensive network of Treaties for the avoidance of Double Taxation with over 60 countries. The following tables show the rates of withholding tax deducted from income, with countries that have signed a double taxation treaty with Cyprus. If you have any questions about Double Tax Treaties in Cyprus, please don't hesitate to...

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Company Re-Organizations

The transfer of assets and liabilities between companies can be affected without any tax consequences within the framework of a re-organization which includes: Mergers / Demergers / Transfer of activities / Exchange of shares.

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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. No tax is payable on the emoluments of the captain, the officer and the crew of a Cyprus ship. Local...

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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.

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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. Once the selection is made it is irrevocable.

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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%. Rights granted for use outside the Republic of Cyprus are not...

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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%. Royalties received by a connected company registered in a European Union Member State are exempt from tax (subject to conditions).

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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. VAT RATES Standard rate – 19% from 13 January 2014 Standard rate – 18% from 14 January 2013 Standard rate - 15% from 1

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Capital Gains Tax

Full capital gains tax exemption on capital gains, except on sale of immovable property situated in Cyprus. 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...

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Immovable Property Tax

Immovable property tax is payable on 30 September each year and is imposed on the market value of the immovable property as at 1 January 1980 and is calculated on the immovable property owned by the taxpayer on 1 January of each year. Both physical and legal persons are liable to this tax. Applicable Rates...

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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. For 2011, the levy is payable by 31 December 2011. The levy for 2012 onwards is payable by the 30 June of...

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2019 Tax Diary

End of each month PAYE deducted from employees’ salaries for the previous month (IR 61A form). Payment of Social Insurance contributions deducted from employee’s salaries for the previous month. Defense contribution deducted from dividends, interest or rent paid for the previous month. Companies, partnerships, the Government or any local authority that pays rent have the...

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