VAT grouping is possible, on an optional basis. The gains from the disposal of shares are specifically tax-exempt, except in the case where the company whose shares are being disposed owns immovable property situated in Cyprus (certain exceptions apply, e.g. Instead of CIT, ship owners, charterers, and managers pay tonnage tax on the net tonnage of the ships they own, charter, or manage. Use of IP Addresses. All Right Reserved. Moreover, as of 2 January 2018, the sale of undeveloped building land by a person, intended for the erection of one or more fixed structures, is subject to VAT at the standard rate of 19%, when the supply is carried out as part of that person’s economic activities. interest income from bank deposit accounts) at a rate of 30%. The ministry is likewise considering scrapping the annual levy of €350 payable by all companies registered in the Republic, and abolishing stamp duties. A general anti-abuse rule (GAAR) has been introduced with effect as of 1 January 2019, and provides that an arrangement or a series of arrangements which are non-genuine, and whose main purpose (or one of the main purposes) is to obtain a tax advantage that defeats the object or purpose of the applicable tax law, shall be ignored for the purpose of calculating the corporate tax liability. Stamp duty is imposed on documents (contracts and written agreements) relating to assets located in Cyprus and/or things or matters taking place in Cyprus. In late 2016, Cyprus signed and became part of the Multilateral Competent Authority Agreement on Country-by-Country Reporting (CBCR), and the Ministry of Finance issued a relevant Decree shortly afterwards. Capital Gains Tax (CGT) is imposed on gains from the disposal of immovable property situated in Cyprus, at a rate of 20%, after indexation allowance. This publication provides valuable information about the tax system in Cyprus for 2019. But while the old Benjamin Franklin might have been right, the Cyprus tax system has received recognition both inside and outside the European Union for being specially attractive. The tax covers companies in the financing and insurance sector with more than 30 percent of their business exempt from VAT. If not, what are the relevant restrictions? CNA also exchanges news with the Macedonian Press Agency, @2019 - Cyprus-mail.com. As mentioned above, a de minimis EBCs threshold of €3,000,000 applies. Do these allow for relief in your jurisdiction for losses of overseas subsidiaries? This is exactly what this chapter of our guide on moving to Cyprus is about. 7.2        Is tax imposed on the receipt of dividends by a local company from a non-resident company? Cyprus income tax system for individuals is progressive. Learn more about Analytics cookies and privacy information. 1.2        Do they generally follow the OECD Model Convention or another model? Cyprus Tax Facts 2019 Deloitte's annual Cyprus Tax Facts, is part of our firm's continuous endeavour to provide complete, valid and updated information to taxpayers. Cyprus has introduced controlled foreign company (CFC) rules with effect as of 1 January 2019. When you set up your business entity, you should ensure that you do the following: The mandatory contributions amount to 17% on worldwide income on dividends, 30% on bank interest, and 3% on rental income. You must spend at least 60 days in Cyprus but at the same time not be a tax resident in any other country, must spend fewer than 183 in any single country in a given calendar year, and have both a permanent home in Cyprus (rented or owned) and carry out business or be employed in the country. 10.3      Does your jurisdiction intend to adopt any legislation to tackle BEPS which goes beyond the OECD’s recommendations? Yes, and they can be carried forward and utilised against the taxable profits of the next five years, except for the following cases: a)  within any three-year period, there is a change in the ownership of the shares of the company and a substantial change in the nature of the business of the company; or. For ship-owning companies, the profits derived by the owner of a ship registered in the European Union or European Economic Area (EEA) (as well as other foreign jurisdictions, subject to conditions) from its operation/charter out are fully exempt from all direct taxes. Cyprus: Corporate Tax Laws and Regulations 2020. The term 'owner' includes a bareboat charterer of a non-Cyprus flag vessel parallel registered in Cyprus. Figure 3. For the purpose of the above, a CFC is defined as a non-Cypriot resident entity, or a foreign PE of a Cyprus tax resident entity, the profits of which are not subject to or are exempt from tax in Cyprus, when the following conditions are met: a)  a Cypriot resident entity, either by itself or together with its associated enterprises, holds, either directly or indirectly, more than 50% of the voting rights, or more than 50% of the capital, or is entitled to receive more than 50% of the profits of the foreign entity; and.

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