A Company incorporated in Cyprus is governed by the Cyprus Companies’ Law Cap.113, being the statutory law for corporate law in Cyprus. The law is mandatory and controls the contents of the Memorandum of Articles and Associations of the Company.
- Corporation tax on net profits at 12.5% flat rate.
- Dividend income is tax exempted in corporation tax.
- Profits on sale of securities/shares in subsidiaries, bonds, derivatives, stock etc are exempted to tax in Cyprus (this applies to gains from trading in securities).
- No withholding tax on dividends, interests and royalties paid to non-resident individuals and entities (GeSY might by applicable for Cyprus residents).
- Cyprus Extensive Tax Treaty network (providing zero or low withholding tax rates on interest, dividends and royalties).
- Losses of entities can be caried forward for five years and set-off against with another entity of the same group.
- Exemption of up to 80% of the overall profits derived from Intellectual Property (IP) (including copyrights, patented inventions and trademarks).
A company is considered tax resident in the Republic if it is managed and controlled from the Republic. As of 31/12/2022, a company will be default to be considered as resident in the Republic, provided it is not tax resident in any other country.