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Why Cyprus?
Taxation in Cyprus
For foreign investment entities as well as the foreign investors Cyprus is a popular jurisdiction than selecting the company establishment. Cyprus is a member of European Union and it has a favourable tax system and conditions for investors.
Cyprus taxation on Dividend income
Dividends received from other Cyprus tax resident companies are exempt from all taxes, subject to certain anti-avoidance provisions.
Corporate income tax
All companies that are tax residents of Cyprus are taxed on their income accrued or derived from all sources in Cyprus and abroad and are taxed under 12,5%. The Cyprus Corporate Income tax law provides various exemptions for different types of incomes, profits and gains (such as dividend income, profits from disposal of shares and others).
Cyprus taxation on Foreign income
Resident corporations are subject to tax on their worldwide income. However, foreign Permanent Establishment income, as well as most dividend and capital gains income from abroad may be exempt from taxation in Cyprus.
Cyprus Personal income tax
An individual is a tax resident in Cyprus if (s)he spends more than 183 days in any one calendar year in Cyprus is subject to personal income tax. Personal income tax is taxed progressively and income up to 19500 for any individual is not obliged to pay any income tax.
Cyprus tax residents have various deductible expenses such as social insurance, donations, insurance payments, which can be claimed and will reduce the taxable base. More over for the high earning individuals who earn above 55 000 EUR have the possibility to reduce the tax base by 50%.
Cyprus Social insurance Contributions
The rate of Social insurance contributions in Cyprus is applied to a maximum level of remunerations. The rate of 8,3% applies for both the employer and the employee in Cyprus and it has a maximum monthly band in the amount of EUR 5005 (for the year 2023).
Cyprus double tax treaty network
Cyprus is always seeking to enlarge its Double Tax Treaties with even more jurisdictions, so investors who are coming to Cyprus would not be taxed twice for the same profits or income earned in other Countries. Currently Cyprus has a more than 65 double tax treaties with various jurisdictions.