Tax Planning

The Republic of Cyprus is considered by international experts in Tax Planning to be a favourable corporate jurisdiction. The State has a reputation of being a ‘clear jurisdiction’ by virtue of the implementation of various anti-money laundering financial and legal schemes and has adopted an approach of attracting international business companies by imposing low taxation.

Cyprus offers one of the most preferential corporate tax regimes in Europe for both holding and trading companies. When the company establishes its management and control in Cyprus, i.e. when it becomes resident in Cyprus, 12,5% corporate tax is imposed on its worldwide income. Sometimes it is advisable for our clients to establish a Cypriot company in another jurisdiction where taxes are only being collected on income generated in this particular jurisdiction. Value Added Tax that is imposed on the provision of services and products constitutes 19% of the selling price and it can be lowered to 0% depending on the nature of the products and services offered by the company. Companies established under Cyprus law also gain either whole or partial exemptions from taxation. The local tax system does not impose any withholding taxes in the following cases: on the interest incurred for the acquisition of fixed assets used in the business, on the profit from the sale of shares, on the dividends received by the company.

In addition, Cyprus has signed international agreements with more than 50 countries in order to avoid dual taxation. These instruments provide that withholding taxes can be deducted from the income of the company by the tax authorities either of Cyprus or of one of the member states. According to the treaties, companies registered in Cyprus should also have the same tax exemptions in the treaty states as they have in Cyprus.

Our lawyers have expertise in advising companies on the specific tax advantages and drawbacks that concern their area of business in particular jurisdictions.

We help businesses to benefit from their particular taxation scheme.