Cyprus Corporate Tax

Cyprus Corporate Tax Planning

Cyprus Corporate Tax is one of the lowest corporate tax in the EU at 12.5%. You can be reduce Cyprus Corporate Tax even further to as low as 4%. You can do that by setting up a proper tax planning.  You will be paying Cyprus Corporate Tax on the net profits of the company after deduction of the expenses. Such expenses are all the costs which go to the production of the revenue. Wages, purchase of materials, rents, electricity, traveling, hotels, etc. are deductible expenses.

For more reading follow the link on Cyprus Company Formation.

When to Pay Cyprus Corporate Tax

You can pay Cyprus Corporate Tax  at 3 stages. One on 31st of July, one on 31st December and one as tax balance, in August 01st of the year following the tax year. According to the Tax Regulations, you as the company owner must make a preliminary estimation of his tax for the tax year in question.

So on 31st July 50% is paid of such Tax.  You can pay on the 31st December 50% of the Tax.

If your calculation of the tax is too far off, a fine of 10% will be imposed on the difference.

The Tax Office in April to June of the year following the Tax year, will issue your final Cyprus Corporate Tax. If there is a difference between your estimated tax and the Tax Office tax calculation, you pay the difference. This difference you will pay on the 01st of August of the year following the specific tax year.

For more reading on the general subject of Tax Rates in Cyprus, please follow this link.

Dividend Tax in Cyprus

A Cyprus company apart from the Cyprus Corporate Tax, has to pay dividend tax. This tax however, is not paid if the company is owned by a foreign investor.

For Cypriot business men, such Dividend Tax is 17%.

Various Other Tax Benefits Apart From The Cyprus Corporate Tax

Apart from the Cyprus Corporate Tax which is very low, a Cyprus company owner has the following tax benefits:

  • You pay 0% tax on any revenues from trading in securities such as shares etc.
  • Again you will pay 0% tax for all profits from the sale of real estate abroad.
  • Further to the above you pay 0% tax on any dividends paid to it by any other company in which it holds shares.
  • Note also that 0% stamp duty in many occasions.
  • Another advantage is 0% tax on profits of permanent establishments abroad, such as hotels, casinos, restaurants, factories etc.
  • More tax benefits. There is 0% tax on any income from selling its own shares.
  • 5% tax on IP rights revenue or income if certain terms are satisfied.

For more reading on our Nominee Services for your Cyprus Company, please follow the link.

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