Overview of the Corporate Tax System in Cyprus
Cyprus has a very competitive tax system that is fully aligned with EU and international regulations. Cyprus tax resident companies benefit from Cyprus’ extensive double taxation treaty network with over 55 countries worldwide as well as access to EU directives. Cyprus’ tax system is in full compliance with EU requirements and also within the OECD requirement against harmful tax practices. The OECD includes Cyprus on the White List of jurisdictions that have substantially implemented the internationally agreed tax standard.
Business activities which are ideally suited to the Cyprus tax environment include:
Cyprus Corporate income tax, at the competitive flat rate of 12,5%, is the main tax applicable on the income of a Cyprus tax resident company.
Tax competences for international business investors:
The taxation of companies is based on residence. All companies that are tax resident in Cyprus are taxed on their worldwide income accrued or arising from sources both within and outside Cyprus. Non-resident companies are taxed in Cyprus only on income derived from a permanent establishment or immovable property in Cyprus. A company is resident of Cyprus if it is managed and controlled in Cyprus. Registration or incorporation in Cyprus is not sufficient to render a company liable to tax in Cyprus.