Cyprus tax matters


Corporate tax

The tax rate on corporate profit is 12.5%, which is the lowest tax rate in the EU. 

Royalties

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). 

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.

Land and land with buildings acquired at market value (excluding exchanges, donations and foreclosures) from unrelated parties within the period from 16 July 2015 until 31 December 2016 will be exempt from capital gains tax upon their future disposal.

Dividends

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

International Trusts

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 international business 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.

Tax benefits of Cyprus intellectual property (IP) companies

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

Double Tax Treaties

Cyprus has concluded double taxation treaties covering the following countries:

  • Andorra
  • Armenia
  • Austria
  • Bahrain
  • Barbados
  • Belarus
  • Belgium
  • Bosnia
  • Bulgaria
  • Canada
  • China
  • Czech Republic
  • Denmark
  • Egypt
  • Estonia
  • Ethiopia
  • Finland
  • France
  • Georgia
  • Germany
  • Greece
  • Guernsey
  • Hungary
  • Iceland
  • India
  • Iran
  • Republic of Ireland
  • Italy
  • Jersey
  • Kuwait
  • Latvia
  • Lebanon
  • Lithuania
  • Luxembourg
  • Malta
  • Mauritius
  • Moldova
  • Montenegro
  • Norway
  • Poland
  • Portugal
  • Qatar
  • Romania
  • Russia
  • San Marino
  • Saudi Arabia
  • Serbia
  • Seychelles
  • Singapore
  • Slovak Republic
  • Slovenia
  • South Africa
  • Spain
  • Sweden
  • Switzerland
  • Syria
  • Thailand
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • United States