Taxation of Cypriot Private Limited Companies
Residency : The management & control principle
Company tax rate : 12,5% (among the lowest in the EU)
Taxed on : Worldwide income
Other : Special contribution for defense at 30% on passive interest income – subject to various exemptions
Balance sheet based taxes : None
Exits taxes : None
Exemptions : Dividends received (certain conditions apply), profit from disposal of securities
Capital gains : Exempt, unless related directly or indirectly to the sale of Cypriot real estate
Interest withholding tax : Nil
Dividend withholding tax : Nil
Royalty withholding tax : Nil in most cases
Double tax treaties network : Very wide range
Parent Subsidiary Directive + other EU Directives : Applicable for all EU and EEA countries
Thin capitalisation rules : None
Controlled Foreign Corporation rules : None
Transfer pricing requirements : On intra group back to back financing arrangements (subject to conditions)
Notional interest deductions : Yes, on new equity used for business purposes, maximum to 80% of the taxable profit
IP regime : Yes, subject to conditions
Tax year : Calendar year
Advance rulings : Readily available