Companies that are Tax Residents in Cyprus are liable to tax on their worldwide income, which is received both in Cyprus and abroad. Companies, which are non tax residents, but carry out business activities through a permanent establishment in Cyprus, are liable to tax only on the income derived in Cyprus.
Companies are considered as Cyprus Tax Residents provided that they are managed and controlled in Cyprus.
Cyprus Corporation Tax Rates |
Companies |
10% |
Semi Government Organizations |
10% |
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Tax Deductions |
Expenditure wholly and exclusive for the production of income. |
100% |
Subscriptions and donations to approved charities (with receipts). |
100% |
Employer’s contributions on salaries.
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100% |
Expenses of business entertainment.
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1% of gross income with a maximum amount of €17.086 |
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Tax Exemptions |
Interest income.* |
100% |
Income from dividends. |
100% |
Profits from sale of securities. |
100% |
Profits of a permanent establishment abroad.* |
100% |
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* Under certain conditions. |
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Tax Incentives |
Losses arising during or after the tax year 1997 can be carried forward and be off-set against income of future years without any time constraints. |
The current year loss of one company can be set-off against the profits of another within the same tax year provided that both are within the same group.* |
Companies’ reorganizations are allowable without any tax effect*. |
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* Under certain conditions. |
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