Cyprus tax system

Cyprus tax system is highly attractive worldwide since it maximises the profit opportunities of foreign investors. The double tax treaties that Cyprus has with many countries around the world together with the lowest tax rate in the E.U. encourages cross-border investments.

Description of the Cyprus tax benefits are presented below:
  • Corporation tax rate of 12,5% - lowest in EU
  • Attractive double tax treaties with many countries around the world
  • Profits from the sale of shares, securities, bonds and units bear no capital gains tax, or any other taxation.
  • Dividends to be distributed bear no withholding tax (for non tax residents of Cyprus)
  • Profits from sale of properties situated abroad bear no tax.
  • Royalty income and expense bear no withholding tax.
  • Foreign dividends and interest received bear no tax.
  • Foreign Permanent Establishments (PE) bear no tax.
  • Any Capital subscription accepted. Companies can be formed even with Euro 100 Share Capital.
  • Interest paid bears no withholding tax.
  • New very low rate of tax for sale of “Intangible assets” such as royalties, software, patents, licences, trade works, concessions, goodwill etc. (See tax reduction examples).
  • Group relief as regards losses in being officially introduced.
  • Reduction of 50% emoluments for high earners, for a period of 5 years, which means effectively the maximum tax rate is only 17.5%.
  • Back to Back loans are introduced between group companies (For further details please send enquiry).
  • Very low tax rates for shipping companies.
  • Credit allowed for taxes paid abroad as regards Interest Received
  • No capital transfer tax
  • Losses are carried forward
  • International Trusts
  • No capital gain tax for sales of titles abroad
  • Profits from the sale of ships are exempt
  • Dividends arising from the sale of ships are exempt
  • Dividends arising from the profits of shipping activities are exempt