Cyprus Tax Fundamentals

Basic concept of Cyprus corporate tax

  1. Scope of income tax under Income Tax Law of 2002, Law 118(I)/2002
    1. Worldwide basis of Cyprus taxation
  2. Definitions
    1. Year of assessment
    2. Accounting period
  3. Residence test for Cyprus companies
  4. Exempt income

Cyprus tax administration

  1. Income tax return
  2. Income tax return for Cyprus companies with non-residence status
  3. Reporting estimated chargeable income
  4. Payment of estimated taxes
  5. Type of tax assessments issued by IRD
  6. Tax appealing procedures in Cyprus
  7. Collection of tax
  8. Return of overpaid tax
  9. Offences and penalties
  10. Advanced ruling system

Taxation of dividends, interest and royalty in Cyprus

    1. Taxation of dividends
    2. Taxation of interest
    3. Taxation of royalties

Capital gain tax in Cyprus

  1. How capital gains are taxed in Cyprus?
    1. Scope of CGT
    2. Exemptions from CGT
  2. Income vs capital gains – how to define?

Overview of tax deductions in Cyprus

  1. Revenue expenses
  2. Capital allowances

Trade losses, unutilized capital allowances, Group relief and PIC

  1. Treatment of trade losses and unutilized capital allowances
  2. Group relief
  3. Double taxation relief and its application

Taxation of overseas income

  1. Double taxation relief and its application

Taxation of non-residents in Cyprus

  1. Withholding tax system

Taxation of shipping business

  1. Taxation of ship owners
  2. Taxation of ship operators
  3. Maritime sector incentives

Taxation of Cyprus investment companies

  1. Taxation of investment dealing company
  2. Taxation of investment holding company

Special Defence Contribution (SDC) in Cyprus

  1. Scope of SDC
    1. Income chargeable at source
    2. Income chargeable at self-assessment
    3. Chargeable dividend income
      1. Actual
      2. Deemed
    4.  Chargeable interest income
  1. Administration of SDC
    1. Computation – a case study
    2. SDC return (IR 623)
    3. Due date for SDC payments
    4. Penalties and fines for non-compliance with SDC

Repatriating income from Cyprus company

  1. Tax implication analysis of available options:
    1. Dividends
    2. Interest
    3. Royalty

Taxation of restructuring, mergers and acquisitions

  1. Tax treatment of transfer of business
  2. Tax treatment of transfer of shares
  3. Tax treatment of combination of transfer of business and transfer of shares
  4. Stamp duty on share transfer
  5. Tax consequences of liquidation

Tax avoidance and tax evasion in Cyprus

  1. Definition of tax avoidance and tax evasion in Cyprus
  2. Cyprus anti-avoidance provisions
  3. Cyprus voluntary disclosure programme

Value Added Tax (VAT) in Cyprus

  1. Definitions
  2. Scope of VAT
  3. Time of supply
  4. Rates
  5. Compulsory and voluntary registration
  6. Bad debt relief
  7. Tax invoice
  8. Trading with EU – VAT implication
    1. Buying from EU companies
    2. Selling to EU customers (VAT and non-VAT registered business and individuals)
  9. Administration of VAT
    1. Returns
    2. Assessments objections and appeals
    3. Collection
    4. Offences and penalties
  10. Deregistration 

Payroll Taxation in Cyprus – Social Insurance Contribution (SIC) and Social Cohesion Fund Contribution (SCFC)

  1. Scope of SIC
  2. Scope of SCFC
  3. Tax rates of SIC
  4. Tax rates of SCFC
  5. Administration of SIC
  6. Penalties and fines of SIC
  7. Administration of SCFC
  8. Penalties and fines of SCFC

Taxation of expatriates in Cyprus

  1. Definitions
  2. Scope of PAYE
  3. Tax rates
  4. Reliefs available to expats
  5. Basic example - Case study (overseas and Cyprus source income)