A company which is managed and controlled in Cyprus, is considered tax resident in Cyprus and is liable to tax on income arising both from sources within and outside the Cyprus. A company which is not tax resident in Cyprus is liable to tax on income arising from sources within Cyprus only. Cypriot tax residency is achieved, in practice, by either having a majority of Cypriot resident directors or by ensuring that the major decision-making is taking place in Cyprus or a combination of the two. There are certain types of income which are exempt for tax purposes and allowances/deductions that decrease your corporation tax. Taxable and group losses can also be set against your taxable income and as a result save corporation tax. For further details on these issues, please do not hesitate to contact us.

The tax rates that apply to corporations are as follows:

            Type of corporation                            Tax rate
                   Profits (€)                                   %
Companies                                12,5
Life insurance Companies                                12,5

(In the case where the corporation tax payable on taxable profit of life insurance business is less than 1,5% of the gross premium. In this case the difference is paid as additional corporation tax.)