Cyprus «an attractive» jurisdiction

There are many jurisdictions in the world, but why Cyprus is one of the most attractive countries for businesses?

Cyprus, a Member State of the European Union since 2004, with a wide network of double tax treaties, common law based legal system and a beneficial tax regime.


Cyprus Tax Regime Beneficial Towards Foreign Investors: Tax In A Nutshell

  • Cyprus tax residency is determined by the “effective management and control”;
  • Corporate tax rate 12.5% on worldwide income;
  • Dividend income is fully exempt from Tax*;
  • Profit from the disposal of securities is exempt*;
  • Profits from permanent establishment outside Cyprus are exempt from Income Tax*;
  • Taxable losses are carried forward indefinitely*;
  • Group relief for utilisation of tax losses*;
  • Dividends paid to foreign resident shareholders are free from Withholding taxes or any other taxes;
  • Interest paid to a non-resident company is exempt from Withholding taxes;
  • Notional interest deduction on new equity;
  • Interest deduction incurred for the acquisition on fixed assets used in the business;
  • Tax neutral on profit or losses arising from foreign exchange rate fluctuations;
  • All expenses incurred for the production of income are tax deductible;
  • No thin capitalisation rules;
  • No transfer pricing rules; transactions incurred at arm’s length principles;
  • Capital gains tax only imposed on profit on disposal of immovable property situated in Cyprus or shares of non-listed Cy-Co owing immovable property;
  • Double tax treaties have been concluded with more than 50 countries from all continents;
  • Tax credit for foreign taxes;
  • Cyprus tax authorities provide binding advance tax rulings;
  • Cyprus permits the transfer of corporate seat into and out of Cyprus with no exit taxes or re-incorporation fees;
  • Full adoption of the EU Parent-Subsidiary Directive, EU Mergers Directive, EU Royalty and Interest Directive, EU Directive on Mutual Assistance and Cooperation.

Royal Pine & Associates is a strong independent provider of trust and corporate services and provides comprehensive and specialized advice and services in all aspects of domestic and international business. Please contact us to find out more about the above matter.


*Subject to conditions

Posted on Jul 24, 2017

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