The Cypriot taxation system is not complicated, however, like any country, Cyprus has its own particularities when it comes to the taxation of individuals and companies. This is why when coming to Cyprus it is recommended to ask for specialized advice from an accountant.
With a vast experience in company formation in Cyprus, our local specialists can advise on the accounting matters related to a foreign investor’s business in this country. We work closely with a team of accountants specialized in offering tailored solutions. Our accounting services in Cyprus target both individual and corporate clients from or outside the country.
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Cypriot economic environment
Cyprus offers plenty of possibilities for foreign investments. As an EU Member state since May 2004, the country provides foreign investors with the opportunity to easily access the EU market. Furthermore, the advantageous location of Cyprus, at the crossroads of three continents, Africa, Asia, and Europe, offers a gateway to and from each of these zones.
The European standards infrastructure, a robust telecommunications system and a very comfortable standard of living have attracted over the years a qualified and educated workforce ready to provide entrepreneurs decided to form a company in Cyprus with high-quality services for low operating costs. Another very important advantage offered by this country is pro-business legislation and one of the most friendly and attractive tax systems in Europe.
What you need to know about taxation in Cyprus
Cyprus can offer a lot of tax benefits if one knows how to take advantage of it. Our accountants in Cyprus are here to offer legal tax planning solutions based on our clients’ needs and particularity of their cases.
In order to know how taxation in Cyprus works, one should pay attention to the following aspects:
- – the taxation system in Cyprus is made up of several direct and indirect taxes;
- – individuals and companies with activities in Cyprus are imposed different taxes;
- – Cyprus has signed various double taxation treaties and thus offer various advantages;
- – Cyprus tax residents are taxed on their worldwide income here, while non-residents are taxes on the income generated here only.
Individuals will be imposed with the personal income tax which is imposed at progressive rates, as it follows:
- – a 0% rate is applicable to a maximum income of 19,500 euros per year;
- – a 20% rate is applicable on annual incomes ranging between 19,501 and 28,000 euros;
- – a 25% rate is applicable on annual incomes ranging between 28,001 and 36,300 euros;
- – a 30% rate is levied on annual incomes between 36,301 and 60,000 euros;
- – a 35% rate applies to any amount above 60,000 euros per year.
As an advantage, local and foreign individuals living in Cyprus should know that the tax authorities here do not impose any inheritance and capital gains tax on the holding shares in a company.
Speaking about companies, the corporate tax in Cyprus applies at a flat rate of 12.5%, which is one of the lowest in Europe. Adding that to the fact that Cyprus is an onshore business destination within the European Union, makes this country very appealing from a taxation point of view.
If you want to know more about the taxation system, our Cypriot company formation specialists are at your disposal with detailed information. We are also here with tax advice and planning solutions.
Tax exemptions and deductions available in Cyprus
Cyprus has many tax benefits, among which some refer to exemptions on incomes such as dividend incomes. Earning derived from distributing or receiving dividends are exempt from taxation in Cyprus. Various incomes derived from employment services can also benefit from tax exemptions under the legislation in Cyprus. Capital gains obtained from disposing of securities are also fully exempt from taxation in Cyprus.
Other exemptions can be obtained from interest payments, under Cyprus’ double tax treaties. However, it should be noted that these exemptions are granted based on the conditions imposed by each country under the agreement with Cyprus.
Apart from tax exemptions, there are certain expenses which can benefit tax deductions in Cyprus. Among these, we remind about the expenses incurred by renting real estate properties in Cyprus. Also, any interest resulted from the purchase of assets used for business purposes will benefit from deductions.
Charities can also be used to deduct certain taxes. These can be achieved by making donations or by establishing various structures such as trusts.
Profits earned from intellectual property-related activities can also benefit from various tax deductions in Cyprus.
Accounting services in Cyprus
Every entrepreneur who chooses to invest in Cyprus will find himself in need of specialized accounting services. Our Cypriot company formation agents are ready to provide all our clients with a very complex and personalized accounting package including all types of services they require for smooth and accurate tax compliance. Our accountantsoffer advice and consultancy in a wide range of services and will make sure all bookkeeping and financial statements are always in order.
Among the accounting services you can count on us in Cyprus are:
- – audit services;
- – tax and business consulting services;
- – legal services related to accounting matters;
- – assistance in the taxation of companies under EU regulations;
- – payroll services;
- – investment services;
- – financial advisory services;
- – tax and VAT registration services for companies;
- – tax minimization solutions;
- – wealth management solutions;
- – bookkeeping services;
- – tax return filings.
We also offer company registration services in order for foreign investors to benefit from whole packages when it comes to doing business in Cyprus.
Company management and tax consultancy in Cyprus
A specialized Cypriote accountant in the country’s legislation and policies will be able to help your company with qualified advice in order to improve the financial results. A well-conducted company management process can save a lot of the business owner’s time, money and energy.
Our accountant will be able to assist in taxation issues related to the registration of your company in Cyprus. Also, we can help entrepreneurs in organizing their financial department and the company’s flow of documents. We can provide consultancy in Cypriote financial and accounting policies and also prepare the necessary documentation for loans applications.
Specialized advice for double tax treaties signed by Cyprus
Cyprus has signed over the years double taxation agreements with more than 48 countries in order to attract foreign investors choosing to open companies in Cyprus by avoiding the situation when they are taxed both here and in their country of origin. We believe all new companies should benefit from the experienced advice of a knowledgeable Cypriote accountant in regards to the provisions of these treaties and that can provide assistance in this matter since he will save a considerable amount of the company’s budget.
Payroll services in Cyprus
When starting a new business in Cyprus an entrepreneur may want to benefit from the professional advice of a qualified accountantfor matters related to payroll procedures. Please contact our Cypriot accountants in order to take advantage of our payroll preparation and employee statements services.
Audit services in Cyprus
The financial statements must be filed on an annual basis in Cyprus. Our accountants can provide accurate and professional audit services, by running a thorough verification of evidence supporting the financial statements and helping the company correct all misstatements.
For more details about the accounting services offered by our Cypriot company formation firm, please contact our team. If you want to relocate or start a business in Cyprus and need accounting services, our local accountants are at your disposal. You can also rely on us if you need specialized company formation services in Cyprus.