СОГЛАШЕНИЯ ОБ ИЗБЕЖАНИИ ДВОЙНОГО НАЛОГООБЛОЖЕНИЯ
DDTs
Cyprus has a big number of DDT’s in place, which provide it with substantial advantages as an international tax centre. These Treaties enable tax-paying companies to set off the extra tax paid in one Country against the tax paid in another country, thus effectively avoiding double taxation.
Amongst others, Cyprus has signed DDTs with the following countries : -
| Austria | France | Mauritius | Syria |
| Belarus | Germany | Norway | Thailand |
| Belgium | Greece | Poland | Ukraine |
| Bulgaria | Hungary | Romania | U.K. |
| Canada | India | Russia and CIS | USA |
| China | Ireland | Singapore | Serbia Montenegro |
| Czech Republic | Italy | Slovakia |  |
| Denmark | Kuwait | South Africa | |
| Egypt | Malta | Sweden | |
For more information on any specific Tax Treaty in place, we strongly advise you to contact a local tax consultant.
The DDTs network, the strength of a Cyprus holding company, the favourable tax regime, and the solid infrastructure make Cyprus the most attractive jurisdiction in Europe for international businesses.
General approach
The accession of Cyprus to the European Union has warranted the restructuring of the local tax system so as to align to EU directives. As a result, the differences in tax treatment of locals and non-residents were ironed out. Generally, an individual is considered a Cyprus tax resident, so long as more than 183 days are spent in Cyprus.
Along the same lines, a company is considered to be a Cyprus tax resident when the management and control is exercised in Cyprus. The broad parameters of the Cyprus tax rates are given below, however, it is advisable that you seek expert advice from a local tax consultant prior to deciding on the tax treatment of yourself or your company.
Corporation Tax
Following the adoption of uniform tax rates, the corporate tax has been set at 10%, which is the lowest in the European Union.
Withholding Tax
No withholding tax is imposed on dividends, interest or royalty payments effected to non-Cypriot beneficiaries.
Dividend Income
The dividend income is not taxed when it is received from other tax resident companies. Dividends received from foreign companies are taxed only when:
· The dividend receiving company owns less than 1% of the paying company’s share capital
· The activities of the paying company generate an investment income of more than 50%
· The paying company is subject to tax at a rate substantially lower than the Cyprus tax rate
A 15% defence contribution tax applies if the dividend income is taxed.
Interest Income
The interest income derived from the ordinary activities of the company is subject to corporation tax. Under certain conditions a defence tax contribution may also be payable.
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Doing Business in Cyprus
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