Cyprus Corporation Tax
Basis Of Cyprus Taxation
Cyprus Corporation Taxes
The corporation tax rate for all companies is 10% Cyprus IBC’s enjoy the following major advantages:
- From 01.01.2003, there is no distinction between local Companies and IBC’s. Net profits on IBCs, and international branches managed and controlled from Cyprus, are taxed at 10%
- International business branches and international business partnerships, which are managed and controlled from abroad, are exempt from corporation and income tax
- No withholding tax on dividend distribution and payments of interest and royalties
- Profits earned from a permanent establishment abroad are fully exempt from corporation tax
- Dividend income is exempt from corporation tax provided the direct holding is at least 1% of the share capital of the overseas company. This exemption will not apply if the company paying the dividend engages in more than 50% of its activities introducing investment income and the foreign tax burden on the income of the company paying the dividends is substantially lower than that in Cyprus.
- Employees of foreign entities can get a work permit visa in Cyprus provided they work in executive positions or in positions where similar skills cannot be found amongst the Cyprus labour force.
- Foreign employees resident in Cyprus will be taxed the same way as the local employees. If employed outside Cyprus, the salaries are tax exempt provided they are remitted through Cyprus.
- Income derived by a way of interest on foreign capital imported and deposited to banks in Cyprus is tax exempt. Other interest received is subject to defence fund contribution at 15%. Interest earned from trading activities or closely related trading activities is liable to 10% tax
- No tax from the sale of shares
- Forty + double tax treaties
- No capital gains tax except on the sale of immovable estate situated in Cyprus
- No time restrictions on carrying forward tax losses
- Group relief for utilization of tax losses
- VAT system not applicable on offshore activities
- Capital allowances and expenses for the purpose of business are allowable for tax purposes
- No stamp duties on normal trading activities
- Exemption from estate duty on shares in foreign companies inherited in Cyprus
- No exchange control restrictions
- Confidentiality and anonymity of the beneficial owners is assured by disclosing their details only to the Central Bank of Cyprus
Cyprus Capital Gains Tax