Joining Europe
As a member state of the European Union since May 2004, Cyprus has entered a new era as an economy offering a great number of advantages within a common European market.
The Euro was adopted by Cyprus as its unit of currency on 1 January 2008, further confirming the country’s macro-economic stability.
Corporate tax rate
Cyprus has a flat corporate income tax rate of 10%. This is the lowest corporate tax rate in the European Union. The tax year is the calendar year.
A company resident in Cyprus is charged corporation tax on its worldwide income (subject to double tax treaty relief). A Company is consider tax resident in Cyprus if it is managed and controlled in Cyprus.
No withholding taxes
Dividends paid to non-resident shareholders are exempt from withholding tax in Cyprus. Also, no withholding tax is imposed on interest paid from Cyprus as well as on royalties paid from Cyprus in respect of intellectual property exploited outside Cyprus.
The nil withholding tax rates apply irrespective of whether the recipient is a body corporate or an individual, the country of residence of the recipient or whether a relevant double tax treaty exists.
Capital gains and income tax exemption for securities
Cyprus does not impose income or capital gains tax on the profits and gains derived from the disposal of securities, irrespective of whether the profits and gains are considered to be of a revenue or capital nature.
Securities, as defined in the law, include shares, bonds, debentures, founder’s shares and other securities of companies or other legal persons and options over such securities.
