Cyprus IP Box Regime
On 14 October 2016, the House of Representatives passed amendments to the Income Tax Law to align the current Cyprus IP tax legislation with the provisions of Action 5 of the OECD’s Base Erosion and Profit Shifting (BEPS) project. The amendments apply retroactively, as from 1 July 2016.
Cyprus is an attractive destination for foreign investors as it provides a transparent and efficient tax system as well as a reliable commercial and legal framework, that is aligned with EU and international regulations.
As a member of the EU and part of the Eurozone community, Cyprus qualifies as a stable destination for foreign investors and gives access to a growing double tax treaty network worldwide.
Below, we have summarised the key benefits utilised when incorporating your business in Cyprus:
Corporate tax rate of 12.5% which is one of the lowest rates in Europe.
Access to EU directives and double tax agreements with over 60 countries.
Dividend income exemption from corporation tax and zero or low withholding tax on profits from foreign subsidiaries.
No capital gains tax on gains arising from the disposal of securities such as shares or bonds.
No withholding tax on payments to non-residents (dividends, royalties and interest).
Attractive group relief and carried forward losses legislation.
Attractive Cyprus IP tax regime that achieves an effective tax rate of as low as 2.5%.
Zero tax on foreign exchange (FX) gains, with the exemption of FX gains arising from trading foreign currencies and related derivatives.