Cyprus advantageous tax regime

One of the primary tax benefits of incorporating in Cyprus is the country's low corporate tax rate.

 

Cyprus is a well-established international business location that provides a variety of corporate tax benefits to enterprises wishing to establish a company. The country's favourable tax policy, combined with its European Union membership, has made it a popular destination for businesses looking to expand their operations.

One of the primary tax benefits of incorporating a company in Cyprus is the country's low corporate tax rate. Cyprus has one of Europe's lowest company tax rates, currently set at 12.5%. This low rate has attracted a lot of foreign enterprises to relocate to Cyprus, giving it a considerable advantage over other European locations with higher tax rates.

In addition to the low corporate tax rate, Cyprus provides a number of other tax breaks to companies wishing to set up a business in Cyprus. These include a tax credit system for enterprises who spend on research and development, as well as tax breaks for companies in particular industries, such as shipping and tourism.

Another benefit of establishing a company in Cyprus is the country's favourable tax treaty network. Cyprus has signed several double tax treaties with other nations in order to minimise double taxation for businesses that operate in different jurisdictions. These treaties provide greater certainty and stability to businesses set up in Cyprus while also allowing them to arrange their activities in a tax-efficient manner.

Cyprus also provides firms with a variety of Cyprus tax planning options, such as the use of holding companies, licensing companies, and finance companies. Companies can use these structures to decrease their tax burden by taking advantage of the country's favourable tax code and tax treaty network.

In addition to these tax savings, Cyprus provides a variety of other advantages to firms wishing to create a Cyprus corporation. A stable political and economic environment, a well-educated workforce, and a well-developed infrastructure are examples of these. In addition, Cyprus serves as a gateway to the European Union, giving firms access to a market of over 500 million consumers.

 

The tax rate on the net worldwide profit from a company incorporated in Cyprus is 12.5%, which is one of the lowest corporate tax rates in the EU. 

There are no withholding taxes on royalty payments relating to the use of rights outside Cyprus paid to non-residents of Cyprus (if the rights are earned in Cyprus, 10% withholding tax is applicable, or 5% in the case of cinematograph films). 

All gains from trading in securities are exempt from capital gains tax, There is no tax on capital gains arising from the disposal of securities listed on a recognised Stock Exchange Market. 

There is no tax on profits from reorganisation, profits derived from the transfer of ownership of shares and the payment of stamp fees.

In Cyprus, there is no tax on dividends or interest payments to non-residents, as well as residents not domiciled in Cyprus. 

Cyprus international trusts have significant tax advantages:

* The income and gains from a Cyprus international trust, derived from sources outside Cyprus, are exempt from any tax imposed in Cyprus;

* Dividends and interest received by a trust from a Cyprus company are not subject to tax, nor to withholding tax;

* Exemption from taxation in the case of a person who is not a Cyprus citizen who creates an international trust in Cyprus and retires in the country, on condition that all of the property settled and income earned is abroad, even if the individual is a beneficiary.

EU Directives and Regulations regarding IP are applicable and have been incorporated into Cyprus legislation. IP rights owned by Cyprus companies are fully protected in all EU Member States and Cyprus' highly beneficial IP tax regime provides exemption from tax for the following:

* 80% of worldwide royalty income deriving from IP owned by Cyprus resident companies

* 80% of any profit made due to the disposal of IP owned by Cyprus resident companies

* any capital expenditure on the acquisition or development of IP is tax-deductible in the year in which it was incurred and for 4 consecutive years after that

* All of the above exemptions are also available for IPs acquired or developed before January 2012

Cyprus has concluded double taxation treaties covering the following countries:

 

 

State

Date of Signature
Treaty/Protocol/Note
Date of entry into force
Publication in the Official Gazette of the Republic
(Number, date, text document)

1

Andorra

18/5/2018

 11/01/2019  4240-1/6/2018

2

Armenia

17/01/2011

19/09/2011

4145 - 05 /09/ 2011

3

Austria

(new agreement)

20/03/1990

21/05/2012

01/01/1991

01/04/2013

2500 - 27 /04/ 1990

4160 - 05 /10/ 2012 

4

Azerbaijan***

29/10/1982

26/08/1983

    26/11/1982

5

Barbados

 03/05/2017

 11/09/2017

 4226 – 12/05/2017

6

Belarus

29/05/1998

12/02/1999

3273- 09 /10/ 1998

7

Belgium

14/05/1996

08/12/1999

3365 - 19 /11/ 1999

8

Bosnia*

29/06/1985

08/09/1986

2073 - 23 /08/ 1985

9

Bulgaria

30/10/2000

03/01/2001

3461 - 30 /12/ 2000

10

Canada

02/05/1984

03/09/1985

2053- 31 /05/ 1985 

11

China

25/10/1990

05/10/1991

2578 - 22 /02/ 1991

12

Czech Republic

(new agreement)

15/04/1980

28/04/2009

30/12/1980

26/11/2009

1599 - 03 /05/ 1980

4114 - 13 /11/ 2009

13

Denmark

(new agreement)

26/05/1981

11/10/2010

10/04/1982

07/09/2011

1704 - 17 /07/ 1981

 4145- 05 /09/ 2011 

14

Egypt

(new agreement)

19/12/1993

08/10/2019

14/03/1995

31/07/2020

2865 - 11 /03/ 1994

4255 – 25/10/2019 

15

Estonia

 

15/10/2012

 

08/10/2013

 

4164 - 01 /02/ 2013

 

16

Ethiopia

30/12/2015

 18/10/2017

4204 – 18 /01/ 2016

17

Finland

15/11/2012

28/04/2013

4167 - 22 /03/ 2013

18

France

18/12/1981

01/04/1983

1468 - 09 /07/ 1982

19

Georgia

13/05/2015

04/01/2016

4196 - 29 /05/ 2015

20

Germany

(new agreement)

(amending protocol)

09/05/1974

18/02/2011

19/02/2021

11/10/1977

16/12/2011

08/12/2021

1199 - 27 /06/ 1975

4145 - 05 /09/ 2011

4264 – 05/03/2021

21

Greece

30/03/1968

16/01/1969

651 - 10 /05/ 1968

22

Hungary

30/11/1981

24/11/1982

862 -07 /05/ 1982

23

Iceland

13/11/2014

22/12/2014

4191 - 19 /12/ 2014

24

India

(new agreement)

13/06/1994

18/11/2016

21/12/1994

14/12/2016

2921 - 04 /11/ 1994

4216 - 25 /11/ 2016

25

Iran

04/08/2015

 05/03/2017

4198 - 25 /08/ 2015

26

Ireland

24/09/1968

12/07/1970

726 - 19 /05/ 1969

27

Italy

(new protocol)

24/04/1974

04/06/2009

09/06/1983

23/11/2010

1586 - 05 /09/ 1980

4125 - 04 /06/ 2010

28

Jersey

11/07/2016

 17/02/2017

4213 – 05 /08 /2016

29

Jordan

17/12/2021  11/04/2022

 4272 - 31/12/2021

30

Kazakhstan 

 15/5/2019

 17/1/2020

 4251-24/5/2019

31

Kingdom of Bahrain

09/03/2015

26/04/2016

4193 - 20 /03/ 2015

32

Kuwait

(new agreement)

15/12/1984

05/10/2010

25/09/1986

30/08/2013

2026 - 18 /01/ 1985

4145 - 05 /09/ 2011

33

Kyrgyzstan***

29/10/1982

26/08/1983

26/11/1982

34

Latvia

24/05/2016

27/10/2016

4211 - 03 /06 /2016 

35

Lebanon

18/02/2003

14/04/2005

08/04/2005

36

Lithuania

21/06/2013

17/04/2014

4173 - 04 /12/ 2013

37

Luxembourg

08/05/2017

 23/04/2018

4235-29/12/2017

38

Malta

22/10/1993

11/08/1994

2860 - 25 /02/ 1994

39

Mauritius

(new protocol)

21/01/2000

23/10/2017

12/06/2000

 2/5/2018

3410 - 02 /06/ 2000

 4233 – 17/11/2017

40

Moldova

28/01/2008

03/09/2008

4098 - 29 /08/ 2008

41

Montenegro*

29/06/1985

08/09/1986

2073 - 23 /08/ 1985

42

Netherlands

01/06/2021

   4268 – 04/06/2021

43

Norway

(new agreement)

02/05/1991

24/02/2014

01/01/1995

08/07/2014

11/06/1996

4180 - 20 /06/ 2014

44

Poland

(new agreement)

04/06/1992

22/03/2012

07/07/1993

09/11/2012

2735 - 04 /09/ 1992

4156 - 30 /03/ 2012

45

Portugal

19/11/2012

16/08/2013

4167 - 22 /03/2013

46

Qatar

11/11/2008

20/03/2009

4099 - 14 /11/ 2008

47

Romania

16/11/1981

08/11/1982

1757- 26 /02/ 1982

48

Russia

(amending protocol)

(additional amending protocol)

05/12/1998

07/10/2010

08/09/2020

17/08/1999

02/04/2012

15/01/2021

3306 - 26 /02/ 1999

4145 - 05 /09/ 2011

4260 - 11/09/2020

49

San Marino

(amending protocol)        

27/04/2007

19/05/2017

18/07/2007

 27/6/2018

4088 - 13 /06/ 2007

4230 - 30 /06/ 2017

50

Saudi Arabia

03/01/2018

 01/03/2019  4237 – 05/03/2018

51

Serbia*

29/06/1985

08/09/1986

2073 - 23 /08/ 1985

52

Seychelles

28/06/2006

27/10/2006

25/10/2006

53

Singapore

24/11/2000

08/02/2001

3641 - 30 /12/ 2000

54

Slovakia**

15/04/1980

30/12/1980

1599 - 03 /05/ 1980

55

Slovenia*

(new agreement)

29/06/1985

12/10/2010

08/09/1986

14/09/2011

2073 - 23 /08/ 1985

4145 - 05 /09/ 2011

56

South Africa

(amending protocol)

26/11/1997

01/04/2015

08/12/1998

18/09/2015

3214 - 16/01/1998

4195 - 08 /05/ 2015

57

Spain

14/02/2013

28/05/2014

4167 - 22 /03/ 2013

58

Sweden

25/10/1988

14/11/1989

2377 - 20 /01/ 1989

59

Swiss Confederation

(amending protocol)

25/07/2014

20/07/2020

15/10/2015

 03/11/2021

4181 - 30 /07/2014

 4259-24/07/2020

60

Syria

15/03/1992

22/02/1995

2863 - 04 /03/ 1994

61

Thailand

27/10/1998

04/04/2000

3394 - 17 /03/ 2000

62

The States of Guernsey

15 /07/ 2014 (in Cyprus), 29 /07/2014 (in Guernsey)

04/03/2015

4182 - 14 /08/ 2014

63

Ukraine***

(new agreement)

(amending protocol)

29/10/1982

08/11/2012

11/12/2015

26/08/1983

19/08/2013

 28/11/2019

26/11/1982

4167 - 22 /03/ 2013

4203 - 23/12/2015

64

United Arab Emirates

27/02/2011

01/01/2014

4145 - 05 /09/ 2011

65

United Kingdom

(amending protocol)

(new agreement)

amending protocol

20/06/1974

02/04/1980

22/3/2018

19/12/2018

18/03/1975

15/12/1980

 18/7/2018

 2/10/2019

 

1107 - 05 /07/ 1974

4238 - 2/4/2018

4248- 28/12/2018 

66

USA

19/03/1984

31/12/1985

1944 - 04 /04/ 1984

67

Uzbekistan***

29/10/1982

26/08/1983

26 /11 1982

  

Notes

*7 Denmark - The existing Convention shall cease to have effect as from 1.1.2012

The treaty  between Cyprus and the Socialist Federal Republic of Yugoslavia is

still in force.

** The treaty between Cyprus and the Czechoslovak Socialist Republic is still in

force

***The treaty  between Cyprus and the Union of Soviet Socialist Republics

is still in force. 

 

TALK TO CONNOR CORPORATE SERVICES

Our consultants are standing by to discuss your needs.
CONTACT US NOW 
THIS WEBSITE IS USING COOKIES
We use cookies to ensure that we give you the best experience on our website. If you continue using the site we assume that you are happy to receive all cookies on this site. Please make sure to read our cookies policy.