Cyprus Tax Planning

Cyprus Tax Planning

Cyprus has been a member of the European Union since 1 May 2004.

The fiscal regime put in place from 1 January 2003 to harmonise the tax legislation with the EU Directives and the EU Code of Conduct of business, offers a range of alternative tax advantages for structuring business through Cyprus.

Cyprus has the lowest corporate tax rate in the European Union.

The low tax rate coupled with an extensive list of double tax treaties, an enviable time zone location and a mature legal, accounting and banking infrastructure places Cyprus high on the list of preferred jurisdictions for international tax planners.

Key Benefits Offered

  • Introduction of the concept of tax resident and non-resident companies
  • Taxation of worldwide income for tax Residents and Cyprus sourced income for non-residents
  • A uniform corporate tax rate of 10%
  • Tax-exempt business profits of non-resident companies
  • Tax-exempt gains on the trading and disposal of securities
  • Tax-exempt dividend income (subject to applicable criteria)
  • Exemption of 50% of interest income (subject to applicable criteria)
  • Tax-neutral group reorganizations
  • Tax-relief for group losses
  • Full adoption of the EU Parent-Subsidiary Directive
  • Full adoption of the EU Mergers Directive
  • Full adoption of the EU Directive on Mutual Assistance and Cooperation
  • Full adoption of the EU Royalty and Interest Directive
  • Transitional rules for existing IBC’s until 2005

by Aspen Trust Group

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