Yes, Cyprus is considered a low tax jurisdiction compared to many other European countries. The corporate tax rate is 12.5% and there are various other tax incentives and exemptions available.
And now, a closer look
Cyprus is indeed considered a low tax jurisdiction, particularly when compared to other European countries. The corporate tax rate is at a reasonable 12.5%, and there are a number of tax incentives and exemptions available.
According to the Organisation for Economic Co-operation and Development (OECD), the effective tax rate for companies in Cyprus is approximately 14.7%, which is notably lower than many other European countries.
Cyprus also has the following tax advantages:
- Dividend income is tax-free between companies.
- Capital gains are exempted from tax in certain situations, such as the disposal of shares.
- Interest income is tax exempt up to the first €12,000 per year.
- Royalties are subject to 2% tax.
So why is Cyprus such a popular choice for businesses and entrepreneurs?
One of the main reasons is its strategic location at the crossroads of Europe, Africa, and Asia. Cyprus is an ideal gateway for businesses looking to expand into these markets, and its proximity to major shipping and transport routes make it an attractive option for logistics companies.
In addition, the country’s highly skilled workforce, excellent telecommunications infrastructure, and business-friendly environment have also played a major role in its success as a low tax jurisdiction.
Cyprus has also taken steps to attract foreign investment, with the introduction of various initiatives and programs such as the “Cyprus Investment Program” and the “Non-Domiciled Status”.
In the words of Timothy Garton Ash, a British historian, journalist, and commentator on international affairs: “Small-state tax competition, of which Cyprus is a good example, is a race to the bottom that is morally and economically wrong.”
Here is a table summarizing some key tax rates in Cyprus:
|Corporate income tax||12.5%|
|Capital gains tax||20%|
|Value-added tax (VAT)||19%|
|Personal income tax||0-35%|
In conclusion, Cyprus is a low tax jurisdiction that offers several tax incentives and exemptions to businesses and entrepreneurs. While some may criticize the “race to the bottom” inherent in tax competition, Cyprus has proven to be an attractive destination for companies looking to expand into Europe, Africa, and Asia.
Watch related video
The video discusses how Cyprus provides possibly the lowest tax option for location independent workers, digital nomads, investors, and some business owners in the EU. The 17-year Cyprus non-domicile program allows residents to pay lower taxes and has a 60-day rule, where individuals only need to spend 60 days a year in the country. Benefits of this program include 100% exemption on remuneration for salaried services rendered outside Cyprus for more than 90 days in the tax year, no tax on dividends, tax-exempt interest, and typically tax-exempt capital gains. The video also encourages viewers to reach out for more information on how to take advantage of these low tax rates.
See more answer options
Cyprus is a Low tax and Secrecy Jurisdiction specifically targeting Russian and Eastern European companies. Cyprus offers a low flat corporate tax rate, 12,5%, strict privacy laws and geographic proximity to Europe and Russia.
Cyprus Tax Rates are generally very low. That makes Cyprus a very attractive jurisdiction. What are the tax rates in Cyprus? What is the VAT rate? Cyprus Tax Rates: Cyprus is a low tax jurisdiction, not a no tax Jurisdiction and as such is ideal for your offshore tax planning.
Cyprus is a traditional tax-based structure that has one of the lowest corporate tax rates in the EU at 12.5%, and also offers non-resident-based companies that are completely free from all local taxation.
Cyprus benefits from a number of key advantages such as the fact that it levies relatively low rates of taxation on companies and retired expatriate residents, it also has double taxation agreements in place with over 40 nations, making it a key centre for holding and investment companies aimed at emerging markets.
Numerous incentives and tax reasons for using a Cyprus company include: Member state of the EU. Modern tax regime acceptable by the EU. One of the lowest corporation tax rates in Europe (12.5%).
More interesting questions on the topic
Also, Is Cyprus a low tax country?
Does Cyprus have low taxes? Cyprus has the lowest corporate income taxation in the EU for resident companies, which is 12.5%. Non-tax residents do not pay this tax. If your annual taxable income is €19,500 or less, you are exempt from tax on personal income.
Regarding this, Is Cyprus an offshore jurisdiction?
Since joining the European Union in 2004, Cyprus is not an offshore jurisdiction or tax haven anymore. All company and entity formations in Cyprus are considered onshore (companies’ tax residences are in Cyprus).
Then, What is the tax status in Cyprus?
As a response to this: Tax Residency Criteria For Residents
There are two criteria for tax for foreign nationals who become resident in Cyprus – the 183-day rule and the 60-day rule. Under the 183-day rule a person who stays in Cyprus for more than 183 days per year in total is considered to be a resident for tax purposes.
Additionally, Is there a tax to pay in Cyprus?
Response to this: Cyprus PIT is imposed on the worldwide income of individuals who are tax residents in Cyprus. Individuals who are not tax residents of Cyprus are taxed only on certain types of income accrued or derived from sources in Cyprus.
Consequently, Is Cyprus a tax haven?
Response will be: Written by Offshore Protection. Cyprus is not officially considered a tax haven, as in 2019 they raised its corporate tax rate to 12.5% and the OECD gave them the same status as many other European countries. However, Cyprus still offers a number of benefits for investors and companies looking to incorporate in the European Union.
Keeping this in consideration, Does Cyprus have a special tax regime for non-doms?
As a response to this: Since 2015, Cyprus has had a special tax regime in place for “non-doms” – non-Cypriot individuals who move to the island and make it their primary residence.
Furthermore, What is the defence tax in Cyprus? The response is: The defence tax is a tax that applies to all Cypriots, but non-doms are exempt from it. The non-dom program also gives a 50% tax exemption on employment income above €100,000 for 10 years. Cyprus also offers other tax advantages, such as no capital gains tax on shares.
What are the tax advantages of moving to Cyprus? Cyprus is excellent for taxes if you’re a non-domiciled tax resident. You can benefit from several tax advantages by moving to Cyprus, including exemption from defence tax on your foreign income, interest, rental income, and dividends. Also, there is no capital gains tax on profits from selling exchange-listed shares and funds.
In this way, Is Cyprus tax-free?
In reply to that: The non-dom tax program in Cyprus exempts foreigners from paying tax on interest and dividends. Capital gains from shares, funds, and bonds are also exempt from taxes. High-net individuals, retirees, and financially independent (FIRE) people can live almost tax-free in Cyprus.
Just so, What is non-dom tax status in Cyprus?
Answer: The non-dom tax status is available to most people who are not Cypriots and were not tax residents in Cyprus for the previous 17 out of the last 20 years. You can set up a limited liability company in Cyprus and only pay 12.5% corporate tax on the profits. You can receive dividends from the company without paying any dividends tax.
Correspondingly, Who can take advantage of the Cyprus tax exemption program?
The reply will be: Almost any European citizen without ties to Cyprus that would make him ‘domiciled’ can take advantage of the program. Profits from the sale of securities such as bonds, shares, debentures and others is an exemption of the Cyprus’ taxation. No withholding tax on the repatriation of income as royalties, interests and dividends.
What is the defence tax in Cyprus?
The defence tax is a tax that applies to all Cypriots, but non-doms are exempt from it. The non-dom program also gives a 50% tax exemption on employment income above €100,000 for 10 years. Cyprus also offers other tax advantages, such as no capital gains tax on shares.