Cyprus Tax Planning
Tax Consultancy
Our firm’s Taxation Department takes pride in its responsiveness, efficiency, reliability and diligence in servicing our clients in a cost-effective, time-efficient and highly qualitative manner.
The appealing tax framework that Cyprus offers especially to foreign investors is, nowadays, commonly known and widespread. The low corporate tax (12,5% which is one of the lowest in the EU) is unquestionably the core attraction within the tax framework of Cyprus which evokes the interest of investors but not the only one; it has many other tax optimization elements to be utilized for efficient tax-planning, some of which are set out below:
- Cyprus has concluded sixty-seven (67) (until May 2022) double tax treaties including with almost all of the developed Countries which form, admittedly, an extensive tax treaty network;
- Fully compliant with OECD practices, directions and guidelines;
- Enjoyment of the tax incentives that the EU Directives offer, namely, Parent-Subsidiary Directive, Mergers Directive, Savings Directive;
- No tax on dividend and interest income for non-tax residents and non-dom tax residents;
- Very low tax on rental income, especially for non-tax residents and non-dom tax residents;
- Low tax on income from royalties;
- Income from dividends or interest made to non-tax residents and non-dom tax residents is not subject to withholding tax;
- Application of IP Box regime based on the nexus approach which grants significant deduction rights on qualifying profits;
- Provides for Notional Interest Deduction for newly introduced equity capital;
- Capital Gains Tax apply only to gains received from the direct or indirect disposal of immovable property situated in Cyprus;
- Profits gained from the business of a Permanent Establishment abroad, is exempt from income tax;
- Trading in securities is exempt from any tax ;
- Credit relief is granted against the foreign tax burden;
- No tax is charged on inheritance possessions;
- No tax on mergers or reorganizations in general;
- The losses of a company are carried forward for a period of five years;
- Immovable property tax has been abolished and currently no such tax is charged;
- Expatriate employees commencing employment in Cyprus are eligible, under certain criteria, to tax deductions.
With relation to the Taxation sector, our Law Firm, provides, amongst others, the following services:
- Advising on any issues regarding the tax framework applying in Cyprus, both on direct and indirect taxation, including on the bilateral or multilateral conventions which Cyprus has ratified;
- Advising on the formation of International tax structures where DTT between Cyprus and another country is involved;
- Advising and assisting clients on the establishment of a business and an economic presence in Cyprus;
- Effecting the issuance of tax rulings from the Tax Department;
- Assisting clients to approve reorganization schemes through the Tax Department;
- Arranging the registration of companies with the tax authorities and the submission of any kind of tax returns;
- Liaising for the payment of taxes on behalf of the clients and obtaining the required tax clearances, including the issuance of capital gains tax clearance for conveyancing purposes;
- Undertaking the negotiation and resolution of tax disputes with the tax authorities;
- Arranging certain Customs procedures.
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