Cyprus Tax Booklet 2016, Tax Information 2016
A company is tax resident of Cyprus if its management and control is exercised in Cyprus. Some of the most important factors used for deciding the place where the management and control of a company is exercised are the following:
- the place where the board meetings are held
- the place where the majority of the board of directors lives
- the place where the company has its central offices, from where the strategic decisions are taken
- the place from where the company’s bank accounts are maintained
Cyprus Tax Residents
Companies tax residents of Cyprus are taxed on their whole income accrued or derived from all sources in Cyprus and abroad.
Non – Cyprus Tax Residents
Companies which are not tax residents of Cyprus are taxed on their income accrued or derived from business activities which are carried out through a permanent establishment in Cyprus and/or any other certain type of income arising from sources in Cyprus.
Corporation Tax Rate
The tax rate for companies is 12.5%.
Type of income Exemption limit
- Interestincome 100%
Provided that the interest income arises from activities other than the ordinary activities of the company or closely related to the ordinary activities of the company.
The interest income of Collective Investment Schemes is considered to be arising from the ordinary activities of the Scheme.
- Dividends 100%
(except those dividends that are deductible from the taxable income of the paying company)
- Profits from the sale of securities 100%
- Profits of a permanent establishment abroad, under certain circumstances 100%
- Exchange gains 100%
(except of exchange gains of companies trading in foreign currencies and related products)