CYPRUS TAX RESIDENCY FOR COMPANIES
A company which is a tax resident of the Republic is taxed on income arising from sources both within and outside of the Republic.
For the above purposes a company is a tax resident of the republic if the control and the management of that company are exercised in the Republic.
Corporate income tax rate
The corporate income tax rate for all companies is 12,5%.
Cyprus is a member of the European Union and operates under a secure legal framework safeguarding the interests of its citizens and companies whilst promoting business growth.
Cyprus’ strategic location established the island as a business hub for corporations around the world. Along with the good business infrastructure and opportunities of investment in sectors such as shipping, energy and real estate, Cyprus has been an ideal location for both work and settlement with families.
Its tax regime, being fully compliant with EU, OECD and international laws and regulations, is very competitive and attractive for both individuals and companies. The incentives are significant, and they concern attractive tax rates and tax exemptions for employees and entrepreneurs who in most cases proceed with the incorporation of a Company in Cyprus in order to benefit and be employed officially in the Republic.
Tax advantages include:
- 12,5% corporate income tax – amongst the lowest in the EU
- The first €19,500 of individual income is tax free.
- From €19,501 and above, individual income tax is rising progressively between the range of 20%-35% depending on the individual’s income.
- Wide Network (over 65) of Double Taxation Treaties
- Exemption from inheritance tax
- Exemption from paying capital gains tax on the sale of shares subject to certain exceptions
- Cyprus Tax Residents and domiciled individuals instead of income tax are liable to defence contribution tax for tax arising from interest and dividends.
Tax residents but non-domiciled individuals will enjoy dividend, interest and rental income free from Special Defence Contribution tax in Cyprus. Irrespective of his/her domicile of origin, an individual who remains a tax resident of Cyprus for a period of at least 17 years out of the last 20 years prior to the tax year in question, shall be deemed as domiciled in Cyprus for SDC purposes
- Tonnage tax for shipping companies
Each tax residency case is unique and it should be managed accordingly having in mind what the individual desires to achieve therefore, specialist advice should be sought.
Our Law Firm offers bespoke legal services regarding tax residency in Cyprus undertaking the procedure of the application of tax residency and provide legal advice on matters that may concern you. Among other services we offer the following:
- Examination and analyze of your own circumstances and provision of advice and action planning tailored to your needs
- Drafting /review of lease, rent / employment and business agreements and contracts
- Liaising with government authorities for maintaining your tax residency status in Cyprus
- Preparation and submission of relevant file
For any further information and/or clarifications please contact us at firstname.lastname@example.org or contact number +35722817711.
Please note that this newsletter is produced for clearly informative purposes and under no circumstance shall be construed as professional advice.
by Amaryllis A. Papantoniou, PAPANTONIOU & PAPANTONIOU L.L.C.