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Taxation and International tax planing

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Due to the fact that Cyprus has the lowest corporate tax rate in the European Union and one of the lowest in the world, it has become an important jurisdiction for the incorporation of International business entities, establishing it as a significant international financial center.

It is thus evident that great attention must be placed on tax planning in an ever growing and demanding worldwide environment.

Taking this into consideration, we keep current on new developments on tax laws and regulations aiming to provide to our clients high quality taxation planning in order to maximize their tax benefits and advantages while at the same time minimizing their tax liabilities and ensuring that they meet all compliance requirements.

Double Tax treaties

Cyprus offers substantial tax incentives for the international investor due to it's favorable tax regime and the numerous double tax treaties that it has signed.

In fact, Cyprus differs from most other offshore jurisdictions as it has a large number of double tax treaties to offer (35 in total).

Generally speaking, the double tax treaty provides reduced or even nil rates of withholding taxes in dividends, interest and royalties paid out of the contracting state. It also allows avoidance of double taxation in the case where a resident in one of the contracting states derives income from other contracting states.

By utilizing Cyprus numerous double tax treaties the tax burden of the investor can be kept to a minimum enhancing at the same time the shareholders value.

A list of the countries that Cyprus has signed double tax treaties with are:


Austria

Malta

Belarus

Mauritius

Belgium

Norway

Bulgaria

Poland

Canada

Republic of San Marino

Czech Republic

Romania

China

Russia

Denmark

Seychelles

Egypt

Singapore

France

Slovakia

Germany

South Africa

Greece

Sweden

Hungary

Syria

India

Thailand

Ireland

United Kingdom

Italy

United States

Kuwait

Former USSR

Lebanon

Yugoslavia

We can advice you based on your requirements and specifics, which is the best jurisdiction for you to establish a company, as well as the details of any double tax treaty that you maybe interested in.

Business Taxation

We offer to our corporate clients:

  • Assistance in preparation of their tax returns

  • Submission of the required tax return to the Inland Revenue

  • Liaising with the Inland Revenue on their behalf

  • On going tax planning

  • Advice on international tax planning

  • Tax advice on strategic decisions such as mergers & acquisitions, group reorganizations and trusts formations

Personal Taxation

We offer to our individual clients:

  • Assistance in preparation of their tax returns

  • Submission of the required tax return to the Inland Revenue

  • Advice and preparation of capital statements

  • Personal tax planning

  • Advice on tax issues affecting expatriates

  • Liaising with the local tax authorities

Tax planning and key tax facts

Low corporation tax rate-10 %

As from 1st January 2003 Cyprus International Business Companies are subject to a tax rate of 10 % on their taxable income, provided that management of control is exercised from Cyprus. This is the lower corporation tax rate in Europe and the nearby countries. Companies incorporated in Cyprus but their management and control is not exercised from Cyprus are not considered to be tax residents in Cyprus and as such are not taxed in Cyprus.

Double Tax Treaties

By utilizing the provisions of the wide network of Double Tax Treaties that Cyprus has signed together with the low tax rate of 10 % on taxable profits, International Business Companies registered in Cyprus can enjoy significant tax savings in their operations and investing activities.

Other tax reasons

There are several taxation benefits in setting up an International Business Company in Cyprus as outlined in the section Tax reasons for doing business in Cyprus.

Tax residency in Cyprus

It is important to point out that if the management and control of Cyprus International Business companies is exercised from Cyprus then they will be considered as tax residents of Cyprus and hence they will be eligible to utilize the tax incentives of the Cyprus taxation system and the concessions of the numerous double tax treaties that Cyprus has signed.
Appointing the majority of the directors from Cyprus residents can fulfill this requirement.
An individual is considered to be tax resident in Cyprus if he/she lives in Cyprus for a cumulative period exceeding in total 183 days per fiscal year.

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