The tax advantages of a company in Cyprus

Saving taxes and strengthening business – that is the motto for cooperation in Cyprus. Due to the fact that many international companies are based here, new opportunities for interesting business relationships open up almost daily.

Corporation tax of only 12.5 %

Setting up a company in Cyprus offers numerous tax advantages. Cyprus has developed into an extremely attractive location for international companies, not least due to its low corporate tax rate. With a rate of just 12.5 %, Cyprus’ corporation tax is one of the lowest in the European Union. This makes Cyprus an extremely competitive and rewarding place to set up a business.

No taxes on dividends

However, the low corporate tax is only the beginning of the tax advantages Cyprus has to offer companies. Another significant advantage for international companies is the fact that there is no withholding tax on dividends paid by foreign subsidiaries. This means that profits transferred between related companies can flow without tax deduction. This regulation facilitates international trade and expansion and helps companies to use their profits more efficiently.

Double taxation agreements with many countries

Another aspect that emphasizes the tax advantages of your company in Cyprus is the extensive network of double taxation agreements (DTAs) that Cyprus has concluded with many countries. These agreements prevent income or profits from being taxed twice by establishing clear rules for the taxation of income and profits transferred between Cyprus and other contracting states. This means that companies doing business in Cyprus generally do not have to bear the full tax burden in their home country and in Cyprus, thereby reducing the overall tax burden.

Tax advantages for private individuals in Cyprus

However, the tax benefits are not limited to corporate profits. Cyprus also offers attractive arrangements for private individuals who benefit from rental income from real estate and capital gains. In many cases, this income is tax-free or subject to low taxation.