Cyprus accounting offices and Finance Companies
An intermediary Cyprus Finance IBC can be placed in between a parent company in a no tax jurisdiction and subsidiary companies operating in countries which signed Tax Treaties with Cyprus . The Cyprus Finance IBC will borrow money from the parent company in a no tax jurisdiction and lend money to the subsidiary companies operating in countries which signed Tax Treaties with Cyprus .
The advantages of a Cyprus Finance IBC are the following:
Interest income of finance companies is considered to arise from the ordinary activities of the company and is subject to corporation tax after the deduction of the interest payable.
Therefore, a small margin of net interest income will be taxable in Cyprus at 10%
No withholding tax on dividends distributed to non-resident shareholders of Cyprus Companies.
No withholding tax on interest paid by a Cyprus Company to non-resident creditors.
Cyprus has concluded tax treaties with more than 40 countries worldwide. Interest Income paid to Cyprus benefits from the low withholding taxes from countries which signed Tax Treaties with Cyprus.
For example interest is paid to Cyprus from Russia , Ukraine , Austria , Ireland , Norway , and South Africa with zero withholding taxes.