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Cyprus Tax System - Introduction |
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We will try in this section to increase your awareness of the tax system in Cyprus. The tax information contained within is based on the tax legislation and practice as at January 2010. Is not our aim to provide a full and detailed description of the prevailing tax system in Cyprus and as a result the information regarding the tax system in Cyprus should only be used as a source of general information and cannot be a substitute for proper professional advice. The tax law of Cyprus, as reformed in 2002 is probably the most modern, effective and simple tax system in the EU. In addition to this, it conforms fully to the EU and OECD regulations. The Organisation for Economic Co-operation & Development (OECD) published in 2009 an updated list of countries which its Global Forum has assessed against the international standard for exchange of tax information. The list was divided into 3 distinct sections: The ‘white list' - jurisdictions that have substantially implemented the internationally agreed tax standard The ‘grey list' - jurisdictions that have committed to the internationally agreed tax standard, but have not yet substantially implemented The ‘black list' - jurisdictions that have not committed to the internationally agreed tax standard
Cyprus is among the jurisdictions to be named on the white list of 40 countries. Opportunities to reduce the income tax burden are numerous, for individuals as well as for domestic and international businesses. |
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Cyprus Tax System - Corporation Tax |
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Basis of taxation Corporation tax is imposed on every company which is a tax resident of Cyprus. A company is considered to be a tax resident of Cyprus whether incorporated in Cyprus or elsewhere, if it is managed and controlled in Cyprus. Companies that are not tax resident in Cyprus are only taxed on certain Cyprus-sourced income, mainly from business activities carried out from a permanent establishment in Cyprus. Tax rates The current tax rate for Companies is 10%. Basis Period The year of assessment is the calendar year. That is the period covering the twelve months from 1st of January to 31st December. However, the Commissioner of Income tax may allow a company to have a different year end. In this case the chargeable income of the financial year should be apportioned on a calendar year basis. |
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Jurisdictions