Accounting and tax

    Cyprus business tax obligations and legal considerations

  1. Corporate tax rate is levied at a flat rate of 12.5% on all net income in Cyprus. The tax year is the calendar year and the deadline for electronic filing of tax returns is 31st March of the subsequent year. Administrative penalties of up to €200 are imposed for late filing and interest for late filing is levied at the rate of 4.75% per annum;
  2. Branches pay corporate tax at the rate of 12.5% and there is no branch remittance tax in Cyprus;
  3. The standard VAT rate levied on provision of goods and services in Cyprus is at a rate of 19%, with a reduced rate of 9%. The registration threshold for VAT in Cyprus is €15,600, and for intra-community acquisitions of goods the amount is €10,251. VAT returns must be submitted quarterly by the 10th of the second month following the filing quarter;
  4. Capital gains derived from the sale of shares of Cyprus companies are tax exempt. Capital gains derived from sale of immovable property and from the disposal of shares in an unlisted company that owns immovable property in Cyprus is taxed at 20%;
  5. Dividends paid to both non-resident and resident companies are not subject to withholding tax. Interest paid to a resident is subject to withholding tax at the rate of 30%. Royalties paid to a non-resident for the use of rights in Cyprus are subject to a withholding tax of 5% on film royalties and 10% on all other royalties;
  6. Real property tax is imposed annually on the market value of immovable property at rates ranging from 0.6% to 1.9%. Transfer of immovable property is taxed at rates ranging from 3% to 8% of the market value of the property;
  7. Tax losses can be carried forward for up to 5 years and may be offset against future taxable profits;
  8. Stamp duty is payable on property situated in Cyprus. Stamp duty on commercial contracts is levied at varying rates with a ceiling of €20,000 per document;
  9. Employers must pay social security contributions on behalf of their employees at the rate of 8.5%;
  10. Cyprus has concluded income tax treaties with 47 countries including Denmark, Belgium, Germany, Kuwait, Ireland, China, Singapore and Sweden;
  11. Healy Consultants Compliance Department will assist our Clients with i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparation of financial accounting records and iv) preparing forecasts, budget and sensitivity analysis;
  12. It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.

Legal and compliance

  1. According to the Companies Act, a Cyprus company must have at least one director and one shareholder of any nationality;
  2. The Memorandum of Association is a contract between the shareholders and comprises i) company activities ii) registered office address iii) shareholder and director details iv) share capital v) profit distribution method;
  3. Each time a change occurs in the particulars of the company or to its officers, the change must be lodged with the Cyprus companies registry;
  4. Each company must have a registered office in Cyprus. Healy Consultants can provide this for monthly fee of US$1,100;
  5. The process of deregistering a company is dictated by the Government. This process will take a minimum of 6 months. Healy Consultants fee to project manage company de-registration is US$1,450. During this 6 months period it is mandatory to maintain a resident company secretary and a legal registered office.

External videos

Contact us

For additional information on our corporate accounting and legal services in Cyprus, please email us at Alternatively please contact our in-house country expert, Ms. Grace Odhiambo, directly:
client relationship officer - Grace
Cyprus chamber of commerce and industry (CCCI) Government web portal of the Republic of Cyprus Cyprus tax department (direct taxation) - Cyprus inland revenue department Cyprus Investment Promotion Agency - invest in Cyprus (CIPA) Cyprus ministry of finance Central bank of Cyprus