For our BBP clients to assist managing taxes we prepared summarized information about main taxes, showing schemes of using companies registered in the same jurisdiction and Cyprus will be the first one.
Tax rate: 12,5 % / certain types of income are tax exemp or are subject to other types of taxation
Tax residency: a company is rezident in Cyprus if its management and control exercised in Cyprus
Basis of taxation: rezident companies are taxed on their worlwide income.Non-resident companies are taxed only on their Cyprus sourced income.
|– profit from sales of qualifying titles(e.g.shares, bonds, options on titles)- passive interest ( e.g. bank depost interest)- dividends- profit of a permanent establishment abroad||– 80% deemed expenses of the profit arising fromthe use or sale of qualifying Intellectual Property- capital gains from the disposal of immovableproperty situated outside of Cyprus|
|Expenses incurred wholly and exclusively for the production of taxable income||Donation to approved Cyprus charities|
|Capital allowances on fixed assets||Contributions to approved funds|
|Notional interest deduction on new equity|
|Interest related with acquisition of non- business assetImmovable property tax||Professional taxEntertainment expenses if excess 1% of the gross income or EUR 17086|
II. Special cotribution for defence ( DT)
DT is a tax imposed on certain types of income earned from Cyprus tax resident entities.Non-residends are exempt from special contrubution for defence. Tax rates:
|Dividend income from Cyprus resident company||Nil|
|Dividend income from non-Cyprus resident company||Nil or 17%||17%- received dividends from passive income company|
|Interest arising from ordinary activities of the business||Nil|
|Other interst income||30%|
|Rental income ( reduced by 25%)||3%|
III.Capital gains tax
Tax rate: 20%. Applicable only on gains from disposal of immovable property located in Cyprus or shares in companies which own such property.
IV. Withholding tax
There are no Cyprus withholding taxes on any outgoing payments from Cyprus- interest, dividends, royalties, fees. Towards non- Cyprus residents.