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.
For further info on Corporate Taxation in Cyprus click here
Intellectual Property Tax (IP Box) in Cyprus drops the effective tax rate to as low as 2,5%. Probably the lowest effective tax rate for IP in the European Union. This is why a lot of multinationals are moving the management of their IPs in Cyprus