If you want to incorporate in Cyprus, this article explains the tax laws for a LTD which is the most common legal entity in Cyprus.
Cyprus taxes corporate income on a worldwide basis. This means that income accrued outside the country, from our research, and these things do change, is subject to a 12.5% tax. Cyprus may have exemptions to bring in income accrued offshore, such as dividends or capital gains. Profits of foreign P.E. of a Cyprus resident company may be tax exempted under certain conditions. Taxes are lower than average in Cyprus because the highest corporation tax rate is 12.5%. This ranks Cyprus as 42th overall in terms of corporate tax rate worldwide.
The valued added tax rate in Cyprus is 19.00%, that ranks Cyprus as 127th overall with regards to VAT globally. In terms of other taxation, an employer will contribute 9.5% to the equivalent of a social security fund and an employee will contribute 7.8%.
Thin cap laws are not in play. This refers to any sort of requirements on given company with respect todebt-to-asset ratios.
Dividends received from resident or foreign entities are usually exempted of taxation. Foreign-source dividends received may be subject to a 17% tax, if they are from a company, which more than 50% of its activities lead to investment income and is subject to a profits tax lower than 6.25%. Dividends are payments of earnings of the business, determined by the board of directors, to shareholders. Dividends can be one of the following shares of stock, cash payments, or other property.
Capital Gains from disposals of shares, bonds and other titles are tax-exempt. Capital Gains from Cyprus immovable properties or from the disposal of shares of a company which owns real estate property in Cyprus, may be subject to a 20% Capital Gains Tax.
Dividends, interests, royalties paid to non-residents are not subject to withholding tax. Which means that the relevant tax autorities do not require legal entitites to withhold payments abroad on dividends, interests or royalties.
There is a capital duty of €103+0.6% on the nominal value of the authorized share capital. There is no tax on net wealth in Cyprus. There are no inheritance taxes in CY. There are real estate and transfer taxes in Cyprus. There are popular and well known research and development breaks on taxation in Cyprus.
The above is not tax or legal advice for your particular circumstances. We are able to to help you find to a tax advisor in Cyprus who will advise you. Ready to get started? Click incorporate now if you are in a hurry, or press the free consultation button above.
It takes approximately 29 hours to file and prepare documents for a Cyprus Mixed (Common and Civil law).
The corporate tax is approximately 12.5% which is 45 in the world.
Owners of a company in Cyprus are not allowed to carry back a loss and may be allowed to carry forward a loss for 5 years.
The vat rate in Cyprus is 19% which ranks 127 in the world.