Tax facts for Cyprus companies

A company incorporated in Cyprus is governed by the Cyprus Companies Law, Cap. 113, the statutory corporate law of Cyprus. The law is mandatory and controls the contents of the company’s Memorandum and Articles of Association.

• Corporation tax on net profits at a 12.5% flat rate (rate applicable at the date of publication).
• Dividend income is exempt from corporation tax.
• Profits on the sale of securities (shares in subsidiaries, bonds, derivatives, stock, etc.) are exempt from tax in Cyprus, including gains from trading in securities.
• No withholding tax on dividends, interest and royalties paid to non-resident individuals and entities (GeSY may apply to Cyprus residents).
• Extensive double tax treaty network, providing zero or low withholding tax rates on interest, dividends and royalties.
• Losses can be carried forward for five years and set off against profits of another entity of the same group.
• Exemption of up to 80% of the overall profits derived from intellectual property (IP), including copyrights, patented inventions and trademarks.

Tax residency of companies

A company is considered tax resident in the Republic if it is managed and controlled from the Republic. As of 31/12/2022, a company incorporated in Cyprus is by default considered resident in the Republic, provided it is not tax resident in any other country.