Corporate Tax Residency in Cyprus

Efstathios K. Efstathiou > International Business Company IBC > Corporate Tax Residency in Cyprus

Corporate Tax Residency in Cyprus

We at Efstathios C. Efstathios LLC provide you with professional services (on Corporate Tax Residency in Cyprus) to both Cypriot and foreign clients. Our employees lead a company that never loses its passion for helping businesses. Efstathios C. Efstathios LLC proactively collaborates with the individuals who observe a dignified code of conduct in their organizations.

We Prioritize Your Comfort

Efstathios C. Efstathios LLC creates significant benefits in Cyprus, such as low corporation tax rate and income tax regime, which includes numerous tax deductions and exclusions easier for you. Cyprus has a lot more to offer and so do we! Signing a contract with our Lawyer will gauge your way to an easy and smooth road to become a part of Cyprus.

Benefits Include;

12.5% corporate tax rate
Income Tax Deductions
minimal income tax
IP Box System
Income Tax Exemptions
Tonnage Tax
EU State Members

Get a Consultation with Our Professional Lawyer!

We are committed to offering you special targeted financial and accounting assistance, regardless of how big or small your business is. Efstathios C. Efstathios LLC is aware of the reality of operating a locally and internationally based company, Hence we offer you our assistance at every step in the journey of Corporate Tax Residency in Cyprus.

Our aim is to make your procedure quick and easy with easy understandable paperwork.

Contact us to book a free consultation session with us today and get your taxation concerns resolved. Call us at (+357) 22 755109 and get a proper legal representative now.

FAQs – Frequently Asked Questions

Is there a tax-free limit for companies?

No, there is not. All Cyprus companies are taxed on 12.5% of their profits.

What is the corporate tax rate for Cyprus Companies?

The corporate tax rate in Cyprus is 12.5% and is calculated on the annual profit of any Cyprus registered company.

Deductions on Income Tax for Cyprus Companies

For the purpose of company tax, any costs incurred entirely and solely in generating (taxable) income is deductible.

Type of Outlay	Deduction
As long as the 100% subsidiary company does not directly or indirectly control any assets that are not used in the business, interest expenses incurred for the direct or indirect acquisition of 100% of a subsidiary company’s share capital will be recognized as deductible for income tax reasons. The amount of the interest expense deduction is limited to that which corresponds to assets utilized in the business if the subsidiary possesses (directly or indirectly) assets not used in the company..	Total Amount
An yearly notional interest deduction is available for equity that was added to a corporation as of January 1, 2015 (new equity), whether it takes the form of paid-up share capital or share premium (NID).The interest rate on the new equity is used to compute the annual NID deduction. The yield on 10-year government bonds (as of December 31 of the previous tax year) of the nation where funds are used in the company’s operations, plus a 3% premium (subject to a minimum amount, which is the yield on 10-year Cyprus government bonds as of the same date, plus a 3% premium), constitute the relevant interest rate.	The NID deduction is limited to a maximum of 80% of the taxable profit from assets financed by fresh equity (as calculated prior to the NID deduction)
Donations to reputable charities (with receipts)	Total Amount
According to the “new” Cyprus regime, eligible intangible assets include royalties, embedded income, and other revenue (1 July 2016)	80% of the net profit as calculated in accordance with the “new” regime
According to the “old” Cyprus IP box, qualified intangible assets include royalties, embedded revenue, and other types of income.	80% of the Net Profit
Expenses associated with conducting scientific research, especially development-related research, from small to medium-sized businesses.	Total Amount
Social insurance contributions made by the employer and money authorized on employee salaries.	Total Amount
Employer’s contributions to medical funds from employees.	1% on Employee’s Remuneration
Employer’s contributions to Provident/Pension funds for employees.	Up-to 10% on Employee’s Remuneration
Entertainment expenses for business purposes.	The lower amount of €17.086 or 1% on the gross company income

Type of Outlay	No deduction
Expenses the purpose of which was not the acquiring of income	Total Amount
Private car expenses	Total Amount
Interest applicable to the cost of acquiring a private vehicle regardless of the use and on other assets that were not used for establishment purposes.	Whole amount for 7 years since the day of acquiring the relevant asset
Salaries paid during a tax year but for which no social insurance or other authorized payments were made during that tax year.	Total Amount

What companies have to pay taxes?

Any Cyprus registered entity (Tax resident company) has to pay tax in Cyprus.

Is it possible for company losses to be carried forward?

If a tax loss occurs after a tax year and cannot be offset by other income, it may be carried forward under certain circumstances and deducted from the earnings of the following five years.

Profits made by the business in Cyprus may be used to offset losses from permanent installations elsewhere. Future foreign profits from an exempt permanent establishment are taxed up to the extent of allowable losses.

Are there exemptions of income tax for Cyprus companies?

Yes. There are corporate tax exemptions. Look at the table below.

Corporate Tax exemptions

Type of income	Exemptions
Dividends.	Total Amount
Profit from the sale of securities.	Total Amount
Interest that is unrelated or not directly tied to the company’s regular operations.	Total Amount
Gains associated with variations in foreign exchange rates (forex), excluding forex, that result from trading in foreign currencies and associated derivatives.	Total Amount
Profits of a foreign permanent establishment.	Total Amount
Benefits, profits or redundant obtained from restructuring.	Total Amount

Is there a full Tax guide for Cyprus?

Yes, you can download our free Cyprus Corporate Tax guide in our Library section.