Tax planning and key tax facts

Low corporation tax rate-12,5 %

As from 1st January 2013 Cyprus International Business Companies are subject to a tax rate of 12,5 % on their taxable income, provided that management of control is exercised from Cyprus.(previously it was 10 % as from 1.1.2003 till 31.12.2012)

This is one of the lowerst corporation tax rate in Europe and the nearby countries.

Companies incorporated in Cyprus but their management and control is not exercised from Cyprus are not considered to be tax residents in Cyprus and as such are not taxed in Cyprus.

Double Tax Treaties

By utilizing the provisions of the wide network of Double Tax Treaties that Cyprus has signed together with the low tax rate of 12,5 % on taxable profits, International Business Companies registered in Cyprus can enjoy significant tax savings in their operations and investing activities.

Other tax reasons

There are several taxation benefits in setting up an International Business Company in Cyprus as outlined in the section Tax reasons for doing business in Cyprus.
 

Tax residency in Cyprus

It is important to point out that if the management and control of Cyprus International Business companies is exercised from Cyprus then they will be considered as tax residents of Cyprus and hence they will be eligible to utilize the tax incentives of the Cyprus taxation system and the concessions of the numerous double tax treaties that Cyprus has signed.

Appointing the majority of the directors from Cyprus residents can fulfill this requirement.

An individual is considered to be tax resident in Cyprus if he/she lives in Cyprus for a cumulative period exceeding in total 183 days per fiscal year.

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