Cyprus Tax News 2011

Cyprus Removed From Portugal's Black List

November 2011
Cyprus was removed on November 8 from the Portuguese black list of tax havens. Prior to the removal Portugal was breaching the EU directives by including an EU member in its black list.
The removal from the black list would grant tax benefits including, inter-alia, exemption for Cypriot entities from Portugal's capital gains tax and excluding Cyprus from Portugal's CFC rules.

Cyprus 5% V.A.T. on Food and Medicines

January 2011
Cyprus Increased the V.A.T. rate on food and medicines from 0% to 5%.
The increase which is in line with Cyprus's EU commitments is effective as of January 10, 2011.

Cyprus Off the Italian Blacklist

September 2010
The Italian government published a decree , effective August 4 2010, removing Cyprus from the Italian CFC blacklist.
As a result there are no limits anymore of deduction of costs of an Italian entity related to a Cypriot company.
In addition 95% of dividend income from a Cypriot company and 95% of capital gains from sale of shares in a Cypriot company are tax exempt by the Italian parent company.

Cyprus Italy Income Tax Treaty

June 2009
Cyprus and Italy signed on June 4, 2009 a new protocol amending the existing tax treaty between the two countries.
The new protocol is a result of amendments in the domestic Cypriot laws allowing for exchange of information which was previously protected by Cyprus's laws.
Following the treaty Italy will remove Cyprus from the Italian CFC blacklist. Before the removal undistributed income of a Cypriot susidiary held by a parent Italian company was a taxable income of the parent company.
The protocol is expected to come into effect before the end of this year, following domestic legistlation in both countries.

Cyprus Tax Rates 2009

March 2009
There are no significant changes in Cyprus 2009 rates compared to 2008.
The corporate income tax rate, personal income tax rates and the V.A.T rates, both standard and reduced rates, are the same as in 2008.

Cyprus Tax Rates 2008

May 2008
In 2008 there are no significant changes in Cyprus tax rates, compared to 2007.
The 2008 corporate tax rate is 10%, 25% for semi-government bodies.
Income tax rates for individuals are 20%-30%.
The standard VAT rate in Cyprus is 15%. There are reduced VAT rates of 8% and 5%.

Cyprus Income Tax Rates

January 2007
In the year 2007 the tax rates in Cyprus remain the same as in 2006.
Cyprus's corporate tax rate is 10%, 25% for corporated bodies.
Individual 's income tax rates are 20%-30%.Income below CYP 10,000 is tax exempt.

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