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Cyprus - TAXES ACCOUNTING |
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Corporate tax
Tax rate for resident companies |
A company incorporated in Cyprus is subject to income tax on its worlwide income, A company not incorporated in Cyprus is subject to income tax only on Cyprus source income unless its control and management are Cyprus based The standard corporate tax rate of a private Cypriot company is 10%. International business companies (IBCs) are taxed at a low rate of 4.25% until the end of 2005; thereafter they will be subject to the same rate (10%) as local companies.
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Taxe rate on long-term capital gains |
A capital gains tax of 20% is levied on gains from the disposal of shares in companies whose assets include immovable property,
Non resident companies are exempt from capital gains tax, except on property situated in Cyprus.
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System governing groups of companies and dividends paid by subsidiaries to their parent companies |
Under Cyprus legislation there is no withholding tax on dividends, interests and royalties paid to non-residents of Cyprus.
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Tax rate on branches |
Resident and non-resident branches managed and controlled in Cyprus are taxed as a company. International business branches not managed and controlled from Cyprus are not taxed.
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Income tax
Fiscal year |
The income year is the calendar year.
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Income tax rate |
All Cyprus tax residents are taxed on all income accrued or derived from all sources in Cyprus and abroad. Individuals who are not tax residents of Cyprus are taxed on income accrued or derived from sources in Cyprus. Personal tax rates for 2003 are :
| 0 - 9,000 CYP?/font> | 0% | |
| 9,001 - 12,000 CYP?/font> | 20% | |
| 12,001 - 15,000 CYP?/font> | 25% | |
| Beyond 15,000 CYP?/font> | 30% | |
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VAT rates
Standard rates |
Normal tax rate is 15%.
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Reduced rates |
There are three reduced rates:
- 0% rated good and services: exports, food, newspapers and magazines, books, medecines and children's clothing and footwear.
- 5% reduced rate that applies on hotel accommodation fees, on supplies of goods made in the course of catering, on funeral services and supply of coffins, on road sweeping, garbage collection and recycling and on services of authors, composers, artists and critics of works of art.
- Certain goods or services are exempt from VAT. They include: rents, medical services, insurance and financial services and disposal of immovable property.
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Other important taxes
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Name of tax |
Rate |
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Immovable Property Tax
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0% - 4%
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Accounting
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Obligations and publications
According to section 141 (1) of the Company Law, the Cypriot companies are required to maintain account books justifying :
- total payments received and expenses incurred
- total sales and purchases of goods
- the debts and credit details.
The accounting documents should give an honest and clear picture of all the dealings of the company, justifying each transaction. The content and the layout of the accounting documents should be in conformity with the format defined in Annexure 8 of the Company Law. The balance sheet should be signed by 2 directors of the company except when the company has only one 1 director.
Certification and auditing
The companies of Cyprus need to appoint one or many external auditors in order to authenticate the results announced in the Annual General Meeting. The competence of the auditor should be in conformity to those stated in Article 155 (1) of the Company Law.
Professionals and representative organizations
The main global audit agencies present in Cyprus are : Pricewaterhousecoopers, Deloitte & Touche et Ernst & Young.For further information on the accounting rules applicable in Cyprus, you can contact the l'Institute of Certified Public Accountants of Cyprus (ICPAC).
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Last modified in
June 2003
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