Company Formation Cyprus
Corporate Income Tax only 10%, irrespective of the amount of profits. Distributions of profits are not taxed.
Corporate Income Tax only 10%, irrespective of the amount of profits. Distributions of profits are not taxed.
Our Cypriote Law Firm incorporates on behalf of our clients companies on Cyprus (Cypriote Limited or PLC, Holding Company on Cyprus, Investmentcompanies, Trusts and Foundations on Cyprus), icluding all of the following services: registration, registered office, head office or own office on Cyprus, opening of bank accounts and Nominee (Trustee)-Services (such as Trustee-Direktor and/or Trustee-Shareholder)
Any person (natural or legal) resident of Cyprus is
taxable with its whole world income. Non tax-resident
persons are liable for taxation with their income derived in
Cyprus.
A legal person (company, corporate body) is deemed to be
resident of Cyprus if the management and the control of the
company are located in Cyprus. Although there is no
definition of "resident" in the sense provided by relevant
laws, it is assumed that a company is a resident of Cyprus
if the majority of the directors resides in Cyprus or if
Board Meetings are regularly held in Cyprus.
A natural person is considered to be resident of Cyprus if
he/she is staying in Cyprus at least 183 days a year.
The Cypriot Income Tax Law prescribes a uniform taxation of
corporations of 10% of the taxable income.
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The taxable income includes:
- profits deriving from business
-profits from interest
- profits from licensing fees,
-profits from rental income of real estate,
- capital gains from securities
Ship management companies may choose to be either taxed
by a corporate tax of a 4,24% tax on their profits or a
taxation based on tonnage.
There is no limit to loss carry-forwards.
Within a firm group, gains of one company can be set off
against the losses of another company. Group profit will be
taxed in this case.
According to the Law on Special Contribution to Defence
Tax (Defence Tax Law), a natural person resident of Cyprus,
has to pay a 15% Defense Tax on its paid dividends. If the
recipient of the dividends is a legal entity, that entity is
exempt from the tax defense, unless the legal entity itself
pays no dividends for at least two years.
Residents of Cyprus (natural or legal persons) pay 10%
defense tax on income deriveed from interest. It is
therefore appropriate to distribute profits or, if they are
not to be distributed, to invest them in securities.
Interest income on bank accounts in Cyprus of non-resident
persons (foreigners as a natural or legal person) is not
subject to Defence Tax.
Should your company distribute dividends to its
shareholders, these dividends may thus remain on a Cyprus
bank account in the name of the shareholder; defence Tax
will not be applied.
Company Formation Cyprus: Income from dividends is categorically not taxable in Cyprus
Income of a company taxable in Cyprus, which consists of dividends paid from another taxable company in Cyprus, is not subject to the Law on Special Duty to Defence tax. Income of a taxable company in Cyprus, which consists of dividends paid from another non-taxable company in Cyprus is not subject to the Law on Special Contribution to Defence Tax, if the taxable company holds at least 1% shares of the company paying the dividends. Income of a taxable company in Cyprus, which consists of dividends paid from a company out of Cyprus is not subject to the Law on Special Contribution to Defence Tax and is also not taxable according to the Income Tax Law. The above exemptions do not apply if; -more than 50% of the income of the company paying the dividends comes from income occurred from financial investments and - the profits of the company paying the dividends are taxed with half or less than half of the Cypriot Corporate Tax, i.e. 5% or less. Both above conditions must be met in order to occur non-applicability.
Learn more:
In Cyprus, there is no Capital Gain Tax, Tax Deductable at
Source or Withholding Tax on dividends paid to non-residents
