Cyprus, because of its privileged geographical position and the well-developed infrastructure, is one of the most competitive business services provider in the European Union. Business world benefits of the simplicity of the tax regime with the competitive tax rate that complies with the European aqcuis, and at the same time is governed by a wide double tax treaty agreement with many countries.
The Cyprus tax regime is one of the Europe’s most attractive thus making the country a popular destination for big international firms to transfer their base, and operations.
Internationals giants from all around the world set up their operations in Cyprus which in the last 15 years has developed and established a solid infrastructure in multiple levels business wise, making all the operations to run smoothly. In addition Cyprus has one the most well trained personnel in Europe.
Below we describe shortly few of the privileges of the Cyprus Tax Legislation for companies and physical person.
Cyprus Companies advantages:
- Corporate Tax of 12,5% on the yearly profits. Lowest tax rate in the EU
- 0% tax on the dividends
- No withholding tax is applied on the dividend’s sharing or the interest payments
- Tax on capital gain is applied only on the real estate based in Cyprus or on the shares of the private company that owes real estate in Cyprus.
- Profits arising from the sale of titles (including shares) are exempted from any tax
- Tax losses can be transferred in the next five years
- Profits arising from a permanent establishment abroad are exempted from tax.
Physical person’s tax
- One of the lowest personal income tax regime, according to the Eurostat statistics, where scaled tax rate is applied according to the yearly income. The first €19500 of the income are not taxable.
- Double tax treaty agreement.
- Cyprus has developed a wide range of the double tax treaty agreements with more than 60 countries, avoiding with this way the double taxation of income.
Cyprus is considered one of the most competitive shipping centers in the world. The profits from the Shipping enterprises are exempted of tax based on the Commercial Shipping legislation and are subject to Tonnage Tax system under circumstances.
Cyprus plays a prominent role as a shipping and control center and continues to enhance its position in the worldwide economy ranking by developing its shipping infrastructure, the attractive tax legislation with the competitive ship registration regime, and the maintenance of the tonnage tax system.
The tax incentives in combination with the financial and not only advantages, the advanced infrastructure, make Cyprus an ideal choice for ship owners, ship charterers and managers.
Value Added Tax (VAT)
- VAT is applied on the below rates:
- 19% standard
- 9% / 5% deducted
- 0% (zero)
in all the delivery of goods and services that take place in the republic, the purchase of goods from other EU members and the import of goods from third countries.
Our firm operates as a qualified chartered accountant, advises and provides services to enterprises that want to operate or settle in Cyprus. Please don’t hesitate to contact us in case you have any queries. Our advisors will be very happy to assist you without any obligation.