Cyprus Tax Facts
Tax Incentives
Losses offset against other sources of income, are carried forward for five years and can be set off against profits of another company of the same group (Group of Cyprus tax-resident companies).
Company Law
The law in Cyprus emerges out of a unique legal system – based on the Anglo-Saxon system, namely common law and equity – in a combination with the Continental system.
Corporation Tax
A company that is tax resident in the Republic is taxed on income accruing or arising from sources both within and outside the Republic.
Tax for Individuals
An individual who is tax resident in the Republic of Cyprus (the Republic), is taxed on income accruing or arising from sources both within and outside the Republic.
Capital Gains Tax
Gains from the disposal of shares of companies which indirectly own immovable property situated in the Republic and derive at least 50% of their market value from such immovable property.
Cyprus Tax Residency
Under the “60-day rule”, which is effective as from 1 January 2017, an individual will be considered as being a Cypriot tax resident provided that the individual satisfies either the “60 day rule” or the “183 day rule”.
Value Added Tax
Value Added Tax was introduced in Cyprus on 1st July 1992 and is imposed on the provision of goods and services as well as on the importation of goods into Cyprus.
Non-domiciled Rules in Cyprus
Any national individual can apply for the Non-Dom Tax Residency under the new 60 day or the previous 183 day rule. A Cypriot Tax resident under the 60- or 183-day rule is subject to tax in Cyprus on their worldwide income.
Special Modes of Taxation
The pension income of any individual residing in the Republic, which arises from services rendered abroad, is taxed at a rate of 5% for amounts exceeding €3.420 per annum.
Cyprus International Trusts
A Cypriot International Trust can also be used for cases where a Settler wishes for a person to benefit from inheritance in the cases where due to the legislation of the individual’s country, they would otherwise be excluded from the inheritance.
Cyprus Investment Firms
A CIF is able to freely provide investment services through representative and branch offices across 30 EU and EEA member states via the EU Passporting System for Investment Firms.
Investment Funds
Cypriot registered AIFs can be sold on a private placement basis or marketed to professional investors across the EU under the Alternative Investment Fund Managers Directive (AIFMD) passport.
Cyprus Permanent Residence Program
Permanent residency status in Cyprus can be obtained through the Permanent Residence Program. Arguably the best fast track program in Europe that permits foreigners to acquire an Immigration Permit through property investment.
Government Annual Levy
Every Cyprus incorporated company is obliged to pay a yearly annual fee to the government; this is called the Annual Levy. The Annual Levy is €350 for every company and is payable from the year of the company’s inception.
Annual Wear & Tear Allowances
Annual wear and tear allowances are calculated as a percentage on the cost of acquisition of the asset used in the business and are deductible from taxable income.
Cyprus Tax Diary
Defence tax contribution deducted from interest, dividends, or rent made to CY tax residents in the previous month