Travel to Cyprus

Archive for June 18th, 2011

Tax residents are taxed in Cyprus on their worldwide income resulting from any business or profession, salary, pension, rents or royalties and sale of business goodwill.

An individual is considered to be a tax resident person of Cyprus if he/she spends more than 183 days in Cyprus.

Non-tax-residents are taxed on business income resulting from permanent establishment in Cyprus, income from salaried services in Cyprus, pensions from Cyprus, rents and royalties from Cyprus and sale of business goodwill.

The personal tax rates are:

Income in Euro (€) RATE%

0    -   19,500                                                0%

19,500 – 28,000                                         20%

28,000 –  36,300                                        25%

Over     36,300                                              30%

Foreign pensions received by a resident may be taxed at his/her option separately at a flat rate of 5% for amounts over €3420.

It should be noted that income arising in Cyprus by non-resident professionals, artists and athletes is taxed at the flat rate of 10% on the gross amount of the remuneration received unless exempted under a Double Tax Treaty.

It should further be noted that any overseas tax withheld or paid abroad in respect of income from abroad which is taxed in Cyprus is allowed as a credit against the Cyprus tax resulting from the taxation of that same income.

INTEREST INCOME

Interest income derived by a tax resident individual is exempt from Income Tax unless it results from ordinary business activities or closely connected to them.

It is, however, taxed under Special Defence Contribution. This tax is withheld at source at the rate of 10% if paid by resident persons. If received from abroad this is taxed by a self assessment at the rate of 10%.

Interest derived by a non-tax-residents are exempt from Income Tax unless it results from ordinary business activities of a permanent establishment in Cyprus or closely connected to them and it is also exempt from Special Defence Contribution.

DIVIDEND INCOME

Dividend income derived by a tax resident is exempt from Income Tax and it is subject to Special Defence Contribution at the rate of 15%, which is again withheld at source from resident companies. Dividends received by an individual from a foreign company must be declared and taxed by self assessment at the rate of 15%. It should be noted that distributions made from Mutual Funds to tax residents of Cyprus are taxed under Special Defence Contribution at the rate of 3%.

Non-tax-residents are exempt from both income tax and Special Defence Contribution.

IMMOVABLE PROPERTY RENTAL INCOME

It is taxed under Income Tax as part of the total income for both tax residents and non tax residents. However, any rent from a building for which there is a preservation order, is exempt from tax.  A deduction of 20% of gross rent is given instead of maintenance and other expenses. Any interest incurred is also allowed as an expense. Additionally, wear and tear allowance of 3% (4% for hotels and industrial buildings) is given on the cost of erection. Rents are also subject to Special Defence Contribution for residents only at 3% of gross rents reduced by 25%.

OTHER EXEMPTIONS

• Profits arising from the disposal of shares and securities.
• Profits arising from an overseas permanent establishment.
• Salary from employment outside Cyprus by a non resident employer or by a permanent establishment abroad of a resident employer, provided this employment lasts for more than 90 days during the tax year.
• 20% of the salary (with maximum exemption of €8550 annually) from any employment exercised in Cyprus by an individual, who was not resident of Cyprus before the commencement of his employment for a period of 3 years from 1^st January  following the year of commencement of the employment.

OTHER TAXES

Capital Gains Tax is imposed on profits arising from the disposal of immovable property situated in Cyprus or from the disposal of shares in companies holding immovable property in Cyprus (excluding companies listed on a recognised Stock Exchange).

• In the case of shares the profit is calculated only in relation to the value of the underlying immovable property.
• The tax rate is 20%.
• Allowable Deductions:

- The Cost of acquisition plus cost of additions or improvements indexed for the inflation and

- All other expenses incurred for the production of the gain.

Immovable property tax is imposed yearly on the value as at 1.1.1980 of the property held in Cyprus as follows:

Value of property In Euro (€) Rate %

Up    to      170860                                                      NIL

170860  -  427150                                                      0.25

427150  -  854300                                                      0.35

Over         854300                                                       0.40

 

Учреждение кипрской компании предоставляет множество преимуществ заинтересованным клиентам, как физическим, так и юридическим лицам, включая налоговые, а также множество других. Как известно, Кипр является благоприятной налоговой системой, в силу множества факторов.
Согласно закону ‘О компаниях’ Республики Кипр, существуют два вида кипрских компаний:
• Акционерная компания с ограниченной ответственностью
• Компания с ответственностью, ограниченной гарантиями ее участников
Налоговое законодательство Кипра проводит различие между компанией -резидентом и компанией – нерезидентом. Кипрское налоговое законодательство предусматривает множество преимуществ, желающим учредить компанию на Кипре, включая: низкий корпоративный налог, ставка которого составляет 10 % , освобождение от налога на доход от дивидендов (при соблюдении определенных условий), освобождение от налога на прибыль от операций с ценными бумагами, отсутствие налога на богатство, множество международных соглашений об избежании двойного налогооблажения и.т.д
Мы готовы предоставить широкий спектр услуг, таких как учреждение кипрских компаний, управление и руководство компаниями, услуги номинальных акционеров, секретариальные услуги, предоставление услуг по регистрации офиса, эскроу услуги, помощь в сфере банковских услуг, бухгалтерские услуги, обеспечение отчетов о должной добросовестности, оказывание консультаций, а также ведение судебных процессов в сфере корпоративного права.

http://www.multilysis.com/cyprus-company-formation.php

Multilysis Services Limited provides detailed information on Holding Companies in Cyprus

Cyprus offers important possibilities for international tax planning. One such possibility which has proved to be very beneficial for international businesses is the use of a Cyprus Holding Company.

Tax Advantages of Forming a Cyprus Holding Companies

• Income from dividends is tax free (with minor exceptions)
• Gains on the sale of shares are tax free in Cyprus
• Capital gains on disposals of capital assets are tax free in Cyprus (except only on real estate situated in Cyprus)
• Proceeds from the liquidation of subsidiaries abroad are tax free in Cyprus
• Profits from activities of a Permanent Establishment abroad are tax free in Cyprus
• Lower or zero withholding tax rates in other countries on remittances of income from dividends, royalties or interest due to wider applicability of Treaties for the Avoidance of Double Taxation and / or due to the EU Parent-Subsidiary Directive
• Distributions by Cyprus Holding Companies to their non-resident shareholders are free of tax in Cyprus

Cyprus may well be the best location within the EU for the establishment of a Holding Company.  International businesses may derive very important tax (and other) benefits from using a Cyprus Holding company.  This is mainly due to the combination of completely tax-free income from dividends and the reduced (or eliminated) withholding taxes from Cyprus’ extensive network of Double Tax Treaties for the Avoidance of Double Taxation.

Read more at http://www.multilysis.com/cyprus-company-formation.php