Tax optimisation strategies are an essential part of every business, and through the establishment of a wide network of double tax treaties and implementation of incentives through its legal framework, Cyprus as a jurisdiction is an integral part of tax structures the world over.
Cyprus limited liability companies are exemplary vehicles for the set-up of cross border investment and trading activities and further, the membership of Cyprus in the European Union ensures that all EU inbound and outbound investments are carried out in an efficient and streamlined way.
The local tax regime is particularly advantageous in areas such as the structuring of intellectual property holding, maritime, shipping and ship management, holding of property.
Our team may provide tailor-made professional advice and assist with tax related advisory services for all aspects of a business.
An introduction to income tax:
An individual is considered to be a Cyprus tax resident if they spend more than 183 days on aggregate in a tax year in Cyprus.
Following the amendment of the Income Tax Laws in 2017, individuals who spend more than 60 days in Cyprus and are not tax residents in any other jurisdiction and/or do not spend more than 183 days on aggregate in another jurisdiction, shall be considered to be Cyprus tax residents provided that the below criteria are fulfilled cumulatively:
a) the individual conducts any business in Cyprus and/or is employed in Cyprus and/or holds an office to a person resident in Cyprus at any time during the year of assessment, and
b) the individual maintains a permanent residence in Cyprus through ownership or rental.
An individual who is a Cyprus tax resident, is taxed on income arising both from sources within and from outside Cyprus.
An individual who is not a Cyprus tax resident, is taxed on income arising only from sources within Cyprus, in certain cases.
|Taxable Income (€)||Tax Rate||Tax payable (€)||Cumulative Tax (€)|
|19.501 – 28.000||20%||1.700||1.700|
|28.001 – 36.300||25%||2.075||3.775|
|36.301 – 60.000||30%||7.110||10.885|
The non-domicile status:
Under the non-domicile status, income regularly subject to Special Defence Contribution such as dividends and interest is exempt from Special Defence Contribution for 17 years.
To be considered a non-domiciled tax resident, an individual must originate (this being place of birth and nationality and place of residence of their father) from outside Cyprus.
A company is considered to be a Cyprus tax resident if its control and management is exercised in Cyprus.
For a company which is considered to be a Cyprus tax resident, tax is imposed on income arising both from sources within and from outside Cyprus.
For a company who is not considered to be a Cyprus tax resident, tax is imposed on income arising only from sources within Cyprus, in certain cases.
Corporate tax is levied at a flat rate of 12,5%.