CYPRUS COMPANIES – MAIN TAX PROVISIONS

The Cyprus tax policy positions Cyprus as an ideal jurisdiction for Holding and Trading Companies.

In summary, the Cyprus Legislation offers the following tax advantages:

  • One of lowest corporate tax rate in the European Union at 12.5%
  • one of the lowest top statutory personal income tax rate at 35% for taxable income over €60.000
  • extensive double tax treaties network with over 40 countries, enabling lower withholding tax rates on dividend or other income received from the subsidiaries abroad
  • no withholding tax on dividend income received from subsidiary companies abroad under certain conditions
  • no withholding tax on dividends received from EU subsidiaries
  • no withholding tax on capital gains and income on the disposal of neither the shares of the subsidiary's share capital nor the shares of the Cyprus holding company
  • no tax on capital gains or income on the liquidation of the Cyprus holding company
  • no withholding tax on distribution of profits
  • outward dividends by the Cyprus Holding Company to its non-resident shareholders are exempt from any withholding taxes
  • profits earned from a permanent establishment abroad are fully exempt from Cypriot tax, subject to certain conditions
  • A group of Cyprus companies belonging to a Cyprus holding company can set off Group relief for the utilisation of tax losses
  • no minimum holding period