Tax Advantages of Cyprus Company

The Tax Rate is 12,5% on profits, one of the lowest in the European Union

0% tax on dividends (conditions apply)

0% withholding tax on dividends, interest and royalties paid outside Cyprus

0% withholding tax on payments of royalties (when these are used outside Cyprus)

0% withholding tax for dividends paid between Cyprus Companies on the condition that the shareholding percentage is above 1%

0% Capital Gains Tax on the sale of real estate situated outside Cyprus or on the sale of shares of a Private Company that owns real estate outside Cyprus

0% tax on the profits from the sale of titles (including shares)

0% tax on the profits of a Permanent establishment of a Cyprus Company outside Cyprus

0% tax on any profits that might arise due to corporate restructurings and any losses incurred may be transfer onto the years ahead from the receiving company

There is no obligation for the shareholders of a Cyprus Company to pay Social Insurance Contributions

Favorable taxation with the tax rate of 12,5% on any interest that derives activities closely related to the usual business activities of the company (i.e. interest from accounts receivable or interest received from other group companies when the company is acting as a Financing Company of the Group)

Low margin of profits is allowed on intergroup financing

Tax liabilities maybe carried forward for 5 years

Tax losses maybe set off between companies of the same group (whether they are Cyprus Tax Residents or Tax Residents in any other EU member state)

Extensive network of Double Tax treaties that mitigates the withholding tax up to 0% on dividends, interest and royalties

Deemed interest deduction will be allowed on new equity funds or share premium introduced into a Cyprus tax resident company and which funds are used for the operations of the company up to 80% of the company’s profits (EBITDA)

Favorable tax exemptions for highly paid employees of the Cyprus Company that were not Tax residents of Cyprus prior to their employment

The tax system of Cyprus is in accordance with the Directives and policies of the European Union and OECD

Access to Parent Subsidiary Directive of the European Union

Access to the Interest and Royalties Directive of the European Union

Access to the Mergers Directive of the European Union

Access to subsidies from the structural funds of the Cyprus Government and the European Union (i.e. investment subsidies, subsidies for the employment of employees)


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