Cyprus > Tax Incentives

Tax Incentives

  • The lowest corporate rate income tax rate within the EU(12,5%);
  • Applicability of all EU directives ;
  • Extensive Double Tax Treaty network;
  • Exemption from tax on incoming dividends (subject to conditions);
  • No withholding tax on outward payments (Dividends-Interest-Royalties);
  • Full exemption from tax on profits from the sale of securities (including shares/units) with no conditions;
  • Tax free re-organisations;
  • Very low acceptable profit margins regarding back to back loan transactions;
  • Tax losses carried forward indefinitely for utilisation against future taxable profits;
  • Capital duty on issue of share capital 0,6% (no capital duty on share premium);
  • Zero tax if management and control is outside of Cyprus;
  • Foreign Permanent Establishment profits earned by a Cyprus company are tax exempt (subject to conditions);
  • Advance ruling practice exists;