Cyprus tax and tax planning

Generous tax incentives

Cyprus not only has one of the most favourable tax regimes in Europe, it also has double taxation agreements with a wide network of countries so that the possibility of an individual or a business being taxed twice is eliminated.

Business and corporate tax

Where the company is a Cyprus-resident company which is managed and controlled from Cyprus, the IBC's profits are subject to only 12.5% corporation tax on its net profits.

Furthermore, the beneficial owners of the company are not liable to any tax on dividends or profits over and above the amount paid by the entity itself.

Business and corporate tax specifics

  • Dividends, interest payments and royalty payments are not subject to withholding tax
  • All capital gains are fully exempt from capital gains tax
  • Corporation tax — a fixed, flat rate of 12.5% and no more
  • 19% VAT — the lowest permissible EU VAT rate

Tax planning and tax structures

It's highly likely that our advice and recommendations will do much to increase the profits of your business. By combining our expert tax planning services with our bespoke corporate services, our tax-related recommendations can be implemented quickly and easily and without having to involve a third party such as a tax law firm. Many of our tax professionals have worked with one or more of the world's leading audit companies and as such, have extensive knowledge and experience of International tax planning.

Taking account of your business goals, we will identify any areas where making some changes could reduce tax and in so doing, make a real difference to your bottom line. Areas for consideration include:

  • International trade
  • International property
  • Investment holding companies
  • Insurance and re-insurance
  • Provision of services
  • Financing
  • Property ownership
  • Leasing
  • Employment
  • Ship registration and management

The significance of Double Taxation Treaties

Businesses or individuals who reside in one country, but make a taxable gain in another country, may find that they are required by domestic law to pay tax on that gain in their country of residence and pay tax again in the country where the gain was made. A double taxation treaty (also known as double taxation agreement) prevents that from happening by protecting an individual or a corporate entity from paying tax twice on the same income, asset or financial transaction.

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