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Tax Department

Businesses


Φυσικά Πρόσωπα Επιχειρήσεις Ακίνητη Ιδιοκτησία Ηλεκτορνικές Υπηρεσίες


Corporation Tax

    Hide details for Tax AssessmentTax Assessment
Companies which are tax residents in Cyprus are taxed on income acquired or obtained from sources both within and outside Cyprus.
Companies which are not tax residents in Cyprus are taxed on income acquired or obtained from a permanent establishment in Cyprus.

Those companies include Cypriot private companies, offshore companies, foreign companies, Cypriot public corporations, European companies, etc.

Income subject to corporation tax means income from commercial profit, rents, intellectual property rights and goodwill, vessel management and any other income generated by the company’s activities.
Hide details for Exemptions from corporation taxExemptions from corporation tax
According to Article 8 of the Income Tax Law, as amended, the following are exempt from corporation tax:
    • subject to such conditions as the Council of Ministers may impose, the income of any company formed exclusively for the purpose of promoting art, science or sport, not involving the acquisition of gain by such company or by its individual members and whose activities are confined solely to that purpose;
    • the income of public religious, charitable or educational institutions, approved as such by the Minister of Finance.
Hide details for Tax ResidenceTax Residence
Companies controlled or managed in the Republic are tax residents in the Republic.

Hide details for Rate of Corporation TaxRate of Corporation Tax
The basic rate of income tax paid by companies is 12.5%.
Exemptions
The table below lists the exemptions from corporation tax:
Income
Exemption
Comments/Explanation
Dividends
100%
The exemption from corporation tax does not apply where the dividends distributed by a company to a company which is tax resident in the Republic are deducted from the taxable income of the company paying the dividend.
Interest (with the exception of interest obtained during the normal course of business or closely linked to the normal course of business)
100%
Profits from exchange differences with the exception of exchange differences from currency trading and trading in related derivatives
100%
Persons engaged in currency trading can make an irrevocable choice as to be taxed only on realised exchange differences.
Profits on the disposal of Securities (note 4)
100%
‘Securities’ means shares, debt securities, bonds, founder’s shares and other securities in companies or other legal entities lawfully incorporated in the Republic or abroad and the rights attaching to them. The term ‘securities’ also includes options on securities, uncovered positions in securities, forward contracts in securities, swap contracts in securities, depository receipts (ADRS and GDRS), claims relating to debt securities and bonds (which do not, however, include claims to the interest on such products), holdings in value indices only where they are then securitised, security repurchase agreements, units in open-ended or closed-ended collective investment schemes.
Benefit, surplus or profit generated by loan restructuring involving the disposal of immovable property
Up to 100%
Profits from a permanent establishment maintained abroad (subject to conditions)
100%
Rents from a building under preservation order (subject to conditions)
100%
Income generated by companies trading in the audiovisual sector in the Republic (subject to conditions)
Up to 50%





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Last Update:

13/04/2021 11:14:02 AM

 




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