all those who wish to start a business in Cyprus must first decide on the commercial vehicle use. There are a lot of options that are: sole proprietorship, partnership, limited liability companies and subsidiaries. The latter is the most commonly used commercial vehicle.
Cyprus a unique opportunity for the international businessman who wants to businesses in Europe, Russia, Middle East and Hesse.
uniform 10% rate of corporation tax applicable to income from around the world, is now levied on all resident companies from 1 January 2003. This is the lowest rate of corporation tax in the European Union and therefore the most advantageous rate of corporation tax for Cyprus.
In view of the new tax law introduced in 2004, the Holding International Business Companies operating from Cyprus now in a much better position because they can enjoy the benefits of exceptions tax and corporate tax benefits under the new tax legislation. Tax exemptions - 50% of interest receivable. In view of the new tax legislation 50% of interest received by companies is tax exempt, excluding interest received from the recipient's ordinary course of business or closely connected with the ordinary activities of the recipient. Dividends - Dividends received received from abroad are now totally exempt from corporation tax under the new tax legislation. Moreover, they are also exempt from the contribution of defense of 15% provided that the direct participation of at least 1% of the shares of overseas companies. restructuring provisions - In view of the constitution of the EC Merger Directive 90/434/EEC in the new tax law, there are tax exemptions on the transfer of assets (including shares) under a reorganization (merger / division / transfer of assets) gains on shares and capital gains -. profits from buying and selling shares are exempt from tax. In addition, there is no tax on capital gains, except for the 20% tax on capital gains by applying capital gains from the sale of property held in Cyprus and shares in unlisted companies, which own immovable property in Cyprus. earnings by a permanent establishment abroad are exempt from taxation. The exemption does not apply if (i) the establishment, directly or indirectly engages in more than fifty percent (50%) in activities that produce investment income, and (ii) the foreign tax burden is significantly lower that of Cyprus.Distributions by Cyprus Holding Companies Dividends paid to non-resident shareholders are exempt from withholding tax. In fact, Cyprus does not impose withholding tax on payments of dividends, interest and royalties (provided the intellectual property rights are not being used in Cyprus) to non-resident beneficiaries.
Corporate Tax Advantages / em> - Carrying forward of losses Tax losses for the year 2000 onwards may be carried forward indefinitely. Losses incurred abroad by a permanent establishment of a Cyprus company can be offset against profits of the Company Cyprus Group relief. - The rules for group relief are now adopted, providing for group relief of tax losses between a holding company and its subsidiaries where the parent company holds at least 75% of the subsidiary directly or indirectly, and / or at least between companies within the same group for the entire year. However, losses of previous years will not be available for group relief. Thanks to these rules a company is regarded as a member of a group if there was at least a 75% subsidiary of the other, or both companies are at least 75% subsidiaries of a third company net treaties double taxation -. Cyprus combines a low-tax regime with a network of agreements against double taxation. It was concluded the highest number of agreements on double taxation than any other offshore jurisdiction, particularly with Central and Eastern Europe and a number of countries in the Middle East. Most treaties follow the OECD model and all have the effect of reducing or eliminating the normal withholding taxes imposed by the Contracting States on dividends, interest and royalties. This is beneficial for trade with some countries in Eastern Europe and Russia because foreign investors investing in Eastern Europe have the opportunity to channel their investments through a country like Cyprus, which has a treaty with the country receiving the allowing a reduction in investment and in some cases elimination of withholding taxes.
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