Trust is determined by a physical person (property holder-Beneficiary) and is the case where a property (real estate, assets or cash) is controlled by one or more persons (Trustees) in the favor of the beneficiary-ies. Trust is a very important mechanism in a successful tax planning.
- Any income, gains and profits from non-Cyprus sources are exempt from income tax, capital gains tax, special defense contribution or any other taxes in Cyprus.
- Double tax treaty agreements between Cyprus and more than 60 countries.
- Dividends, interests or other income of a Cyprus International Trust from an international business company are not taxable and not subject to withholding tax.
- Profits arising from the sale of assets of the CIT are not subject to VAT.
- A foreign resident or retired in Cyprus, is exempted from tax on the income arising from trusts out of Cyprus. Even if he is the beneficiary.
- The Cyprus trust is not subject to estate duty or inheritance tax.
International Collective Investment Schemes (ICIS).
ICIS is a tool for relatively safe investment opportunities. The investments are made by specialized managers or directors and consist of securities, bonds and others.
The control and operation of the ICIS is under the Cyprus Central Bank which of course acts under the supervision and directives of the European Union regarding the funds.
The International Collective Investment Schemes can be the below cases:
- International fixed Capital Company.
- International variable capital company.
- International unit Trust Scheme
- International Investment Limited Partnership
The ICIS can be established for a fixed period or have unlimited duration. The International Collective Investment Schemes benefit some important tax incentives.
The ICIS are treated exactly as a Cyprus company meaning the below advantages apply and not only:
- 10% income tax on yearly income arising from all around the world.
- Exemption of tax on profits coming from the sales of shares.
- No withholding tax and dividends from sources out of Cyprus.
- No withholding tax on income after repatriation.
- Exemption of profits from the sale of deeds.
- More than 60 double tax treaty agreements.