Cyprus Tax News





Is in 2023 Cyprus still consider as tax haven?

May 2023
Cyprus was still considered by some to be a tax haven due to its favorable tax laws and low corporate tax rates.
However, tax regulations and international perceptions of tax havens can change over time due to evolving global economic and political factors.



Cyprus Tax Update 2022

May 2022
The tax office announced on March 31, 2022 that there is an extension for filing the 2021 tax reports without fines.
Both self employed and companies can file their reports till the extended date of July 31, 2022.

Cyprus Jordan Tax Agreement

January 2022
The double tax agreement, DTA, between Cyprus and Jordan was signed on December 17, 2021 and ratified on December 31, 2021.
When in force, the tax withholding rates are 5% for payments of dividends, when the recipient's holding in the payer's capital is 10% or more, otherwise the rate is 10%.
For payment of interest the withholding rate is 0%/5%.
In case of royalties and technical fees the rate is 7%.

Cyprus 2022 Budget

December 2021
Cyprus finance minister presented on December 9, 2021 the budget for 2022.
The budget includes increase of the corporate income tax rate for multinational corporations from 12.5% to 15%, reduction, in certain cases, of the special defense contribution on dividends and interest and introduction of a carbon tax.



Cyprus Reports Filing Extension

October 2021
According to a decree dated September 24, 2021 all taxpayers, companies and self employed, can extend the filing of the annual 2019 tax reports by the new deadline date, November 30, 2021 without fines.

Cyprus V.A.T. Update

July 2020
According to a new decree dated June 23, 2020 the V.A.T. rate for certain services in Cyprus will be reduced from current 9% to 5%.
The new reduced rate will apply to services such as hotel accommodation and restaurants from July 1, 2020 to January 10,2021.

Cyprus Luxembourg Tax Treaty

June 2017
Cyprus and Luxembourg signed on May 8, 2017 a DTA, double tax treaty.
The tax withholding rates according to the DTA are 0%/5% for dividends, the lower applying when the recipient is a company with 10% holding or more.
According to the DTA interest and royalties ate taxed only in the recipient's state of residence.

Cyprus Bahrain Tax Treaty

May 2015
Cyprus and Bahrain signed on March 9, 2015 a double tax treaty, DTA.
The tax treaty which is in line with the OECD model agreement will enter into force on January 1, 2016.

Cyprus Unified Tax Authority

May 2014
The cabinet decided on April 23, 2014 to form a new unified tax authority which will replace the existing two separate authorities, the income tax and the VAT authorities.
The bill has yet to be approved by the Cypriot parliament.



Cyprus 2022 Budget

December 2021
Cyprus finance minister presented on December 9, 2021 the budget for 2022.
The budget includes increase of the corporate income tax rate for multinational corporations from 12.5% to 15%, reduction, in certain cases, of the special defense contribution on dividends and interest and introduction of a carbon tax.

Cyprus VAT Rates 2014

January 2014
Starting January 13, 2014 the new standard VAT rate in Cyprus is increased from previous 18% to 19%.
The reduced VAT rate of 5% remains unchanged while the super reduced VAT rate is increased from 8% to 9%.

Cyprus Portugal Double Tax Treaty

September 2013
The double tax treaty of 2012 between the two countries entered into force on August 16, 2013 applying from January 1, 2014.
According to the tax treaty the tax withholding rate for payments of dividends interest and royalties is 10%.
In general double tax treaties between two countries are boosting mutual investments between the countries offering reduced tax withholding rates from payments of dividends, interest and royalties.
The tax treaty often includes an exchange of tax information clause and definition of a permanent establishment for activities carried in the other country.
It also clarifies certain cross border tax issues.
E.g the treaty would define in what country tax is to be paid when a service supplier/consultant from country A provides services in country B.
In some treaties there is a tax credit under certain terms. e.g. an exemption to a consultant from country A of X dollars per each day of staying in country B in order to supply the taxable services.

Cyprus V.A.T. Rise

January 2013
Starting January 14, 2013 the standard V.A.T. rate will increase from current 17% to 18%.
The new 18% rate will further increase to 19% starting January 13, 2014.
From January 13, 2014 the reduced V.A.T. rate of 8% will increase to 9%.

Cyprus New 17% V.A.T. Rate

March 2012
As from March 1 2012 the new standard V.A.T. rate in Cyprus is 17% compared to the previous standard 15% rate.
There is no change in the reduced V.A.T. rates of 8% and 5%.

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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