Knowledge base

The corporate income tax rate of a Cyprus-resident company is 12.5% on its global taxable revenue, with unilateral credit for related foreign tax suffered. Moreover, non-Cyprus residents are not liable to pay Cyprus withholding taxes on payments. Frequently, the effective corporate tax rate is much lower, or even as low as nil, due to various tax exemptions and allowances.


Following Circulars No.2011/11 and No.2011/5, this article will explain what a "dormant company" is, its symptoms and consequent requirements. The following is an extract from PART 1.7 of the "Company Income Statement" form (EP 4), whereby a definition of a dormant company is considered to be a company that meets the following conditions:


Representatives from the troika of Cyprus’ international lenders, the International Monetary Fund, European Commission and the European Central Bank, recently visited Cyprus for conducting their 4th post-scheme investigation following the islands recent withdrawal from the economic adjustment programme as agreed with the terms of the bailout.


Following the result of the referendum of 23rd June, Britain will in due course be leaving the European Union. The British High Commissioner outlined the processes currently being followed within government to prepare for the Brexit negotiations in order to find an outcome for the UK nationals living abroad in Cyprus.


A number of recently released documents show that the Cyprus passport by investment or naturalisation scheme remains a profitable source of revenue for the island, making almost €5 billion since it started in 2008 and granting EU citizenship to 1,654 foreign investors and their families.


Malta and Cyprus undeniably have the most favourable citizenship by investment programmes in Europe. Many individuals are using such schemes as a means of significant wealth protection and gaining dual nationality; while smaller economies within the EU receive financial compensation for the privilege.


When Cyprus’ fiscal and banking crisis culminated in the March 2013 bailout agreement, President Anastasiades’ government decided to help the economy return to growth as early as possible by giving the construction sector a boost throughout 2014; avoiding unemployment rates sky rocketing to an all-time high of 20%. This also included a number of supply and demand boosting measures to the Cyprus property market.


Berlin-based non-governmental organisation Transparency International are putting pressure on the European Commission to create plans to allow for reporting and full disclosure of all passport schemes of member states that allow foreign investors to acquire either EU citizenship or residence permit.