Cyprus

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TAXES - ACCOUNTING

 

 

Corporate tax

Tax rate for resident companies

A company incorporated in Cyprus is subject to income tax on its worldwide income. A company not incorporated in Cyprus is subject to income tax only on Cypriot source of income unless its control and management are Cyprus based.
The standard corporate tax rate company is 10%.

   
Tax rate on long-term capital gains A capital gains tax of 20% is levied on long-term capital gains for resident companies.
   
System governing groups of companies and dividends paid by subsidiaries to their parent companies Dividends paid are not taxed.
   
Tax rate on branches Branches are subject to general corporate taxation rules.




Income tax

Fiscal year The income year is the calendar year.
   
Income tax rate All Cyprus tax residents are taxed on all income accrued or derived from all sources in Cyprus and abroad. Individuals who are not tax residents of Cyprus are taxed on income accrued or derived from sources in Cyprus.
Personal tax rates are:
0 - 10,000 CYP 0%
10,001 - 15,000 CYP 20%
15,001 - 20,000 CYP 25%
Beyond 20,000 CYP 30%
   
Tax deductions or other allowances Many exemptions are possible, as well as deductions in particular on rental, gifts for approved charitable associations, Social Security, contingency funds, contribution to the funds of pension and premiums of insurance life.



VAT rates

Standard rates 15%
   
Reduced rates 5% and 8%.
The 0% tax rate applies to exports, food, medicine and international transport.
The 5% tax rate applies to hotel services, catering, gas, books and newspapers, and the supply of new dwellings.
Rental of immovable property, financial services, insurance and postal services are exempted of VAT.



Other important taxes


Name of tax
Rate
Land Tax  
0% - 4%  


 

Accounting


Obligations and publications
According to section 141 (1) of the Company Law, the Cypriot companies are required to maintain account books justifying :
- total payments received and expenses incurred
- total sales and purchases of goods
- the debts and credit details.
The accounting documents should give an honest and clear picture of all the dealings of the company, justifying each transaction. The content and the layout of the accounting documents should be in conformity with the format defined in Annexure 8 of the Company Law. The balance sheet should be signed by 2 directors of the company except when the company has only one 1 director.

Certification and auditing
The companies of Cyprus need to appoint one or many external auditors in order to authenticate the results announced in the Annual General Meeting. The competence of the auditor should be in conformity to those stated in Article 155 (1) of the Company Law.



Useful links
Cyprus Trade Centre in Paris

Last modified in January 2007
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