Cyprus has a favourable tax regime. The corporation tax is only 12.5% on business profits which can be further reduced through the use of double tax treaties.
The main advantages of Cyprus tax legislation are:
- Favourable tax rate of 12.5%
- No tax on disposal of securities
- No capital gains tax except from sale of immovable property located in Cyprus
- Favourable taxation of Intellectual property Companies – Cyprus IP Box
- Tax legislation approved by the European Union. Cyprus is also largely compliant country based on OECD reviews
- Profits from permanent establishment abroad are fully exempt subject to conditions
- Dividend income is tax exempt subject to conditions
- Low profit margin for financing companies is allowed
- Notional Interest Deduction
- Favourable exemptions for highly paid employees in Cyprus who were not resident of Cyprus before employment
- Cyprus Tax Resident individuals by staying in Cyprus 60 days during the year
- No withholding taxes on royalties payable to non-resident
- Extensive list of Double Tax Treaties reducing withholding taxes up to 0% on dividends, interest and royalties outside Cyprus
- No withholding taxes on payments of dividends, interest and royalties outside Cyprus
- Tax losses are carried forward for 5 years
- Access to EU parent subsidiary directive
- Access to EU interest and royalties directive
