The Minister of Finance of Cyprus recently announced that, in order to strengthen bilateral relations, the two countries officially signed a double taxation avoidance treaty on the day following the visit of Cypriot President Nicos Anastasiades to Saudi Arabia. The signing of the agreement aims to avoid the double imposition of income tax and prevent tax evasion.
The Ministry of Foreign Affairs of Cyprus stated that this agreement will help promote the further development of economic relations between the two countries and strengthen in-depth cooperation in the field of taxation. The Ministry of Finance of Cyprus noted that upgrading and expanding the network of double taxation avoidance conventions is of high economic and political importance, and this move is also intended to further consolidate Cyprus's position as an WorldWay center.
As is well known, Cyprus offers highly favorable tax rates and has signed double taxation avoidance agreements with more than 40 high-tax countries. The addition of Saudi Arabia as a new member makes it even more convenient for overseas investors to allocate their assets. In Cyprus, the corporate income tax rate is 12.5%, which is the lowest among European countries. It is also one of the countries with lower personal income tax, with a statutory maximum personal income tax rate of 35%.
Corporate Income Tax
The corporate income tax for all companies is a flat 12.5%, the lowest corporate income tax rate in the entire European Union. In addition, there are various tax relief policies applicable to corporate income tax:
• Exemption from tax on dividend income received from other companies
• Exemption from tax on interest income under specific conditions
• Tax benefits for losses
• Exemption from tax on profits from overseas permanent establishments under specific conditions
• Exemption from capital gains tax on securities transactions
• Exemption from tax on profits arising from company reorganizations
• Tax credits for taxes already paid abroad
• Exemption from tax on gains or losses from foreign exchange
Personal Income Tax
According to Eurostat data, Cyprus not only has the lowest corporate income tax but is also one of the countries with lower personal income tax, with a statutory maximum personal income tax rate of 35%. There are also various tax relief policies applicable to personal income tax, such as:
• Exemption from tax on dividend income under specific conditions
• Exemption from tax on interest income under specific conditions
• Tax benefits for losses
• Exemption from tax on profits from overseas permanent establishments under specific conditions
• Exemption from capital gains tax on securities transactions
• Exemption from tax on remuneration for services provided abroad
• Exemption from tax on income from specific types of funds such as injury compensation, provident funds, pensions, or other approved funds
• Non-domiciled residents are not required to pay the Special Defence Contribution on their income
Special Note
Cyprus remains an ideal choice for multinational corporations for international tax planning and is one of the most favored countries by international tax planners. Both Huawei and ZTE have offices in Cyprus. By utilizing Cypriot tax residency, one can enjoy Cyprus's excellent tax incentive policies, including:
• Cyprus has currently signed double taxation avoidance treaties with more than 40 countries and regions (including China);
• A superior tax system with a 12.5% corporate income tax rate, the lowest in the EU;
• No withholding tax on dividends and interest paid to non-Cypriot tax residents;
• Dividend income is exempt from tax in most cases;
• Profits earned by overseas permanent establishments are tax-exempt;
• Gains from the sale of stocks, bonds, or other securities are exempt from tax;
• No capital gains tax on the sale of overseas real estate.
The "Top Ten Immigration Events of 2017" authoritatively released by WorldWay Group indicates that the European investment immigration market is heating up significantly, and Cyprus, as an important European country, is also receiving much attention. Investing 2 million euros in property now not only allows you to enjoy generous tax benefits but also enables you to apply for immigration to Cyprus in one step, allowing your whole family to obtain EU citizenship and achieve both wealth and status. Consultation Hotline: 400-138-2929.