Corporate Tax in Cyprus

Taxation of the Cyprus Limited Company

• The corporate tax rate for Cyprus is 12.5%.
• Certain income types are also subject to a special contribution for defense. (Interest, Dividends, Rents)
• Temporary Tax is payable in two equal installments on the 31st July and 31st December of the current year, and Self-assessment tax (tax balance from the previous year) is payable on the 1st August (of the following year).
• The Deadline for electronic filing of the Company’s Tax Return is 31st March – 15 months after the end of the calendar year.
• Taxable profits include the profits that the company makes from renting and/or doing business.
• Additionally a Cyprus Limited Company is subject to Capital Gains Tax based on the provisions of the relevant law for profit accumulated from the disposal of:
  • immovable property situated in Cyprus;
  • shares of companies whose property consists of, inter alia, immovable property situated in Cyprus;
  • shares of companies which either directly or indirectly participate in a company or companies which own immovable property situated in Cyprus and at least 50% of the market value of such shares is derived from the said property.
• Cyprus is using the residence principle of taxation and therefore, a company that is managed and controlled in Cyprus regardless of where it was incorporated is liable to pay company tax on all its profits from its worldwide income.
• If the company isn’t based in Cyprus but has an office or branch in Cyprus, it only pays company tax on its profits from its activities in Cyprus.

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