Tax in Cyprus 

The taxation of companies is based on tax residency. Under the new legislation companies are considered resident in Cyprus and taxed in Cyprus if they are managed and controlled in Cyprus.

Currently, there is no withholding tax on dividends, interest and royalties payable to non-residents (foreign companies and individuals).

The corporate rate is 12.5%.

The term “resident” has been added to the vocabulary of relevant terms under the new taxation system. For corporate entities, as mentioned above, the criteria is management and control. As far as individuals are concerned, an individual who stays in Cyprus for a period or periods exceeding in aggregate 183 days in the year of assessment is considered resident in Cyprus.

Tax liability is based either on residence (worldwide income for residents) or on Cyprus-sourced income only for non-residents. Incorporation of the Company is no longer necessary for establishing residence in Cyprus.