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Cyprus has Issued New Tax Circular for Tax Residency in Cyprus

Cyprus has Issued New Tax Circular for Tax Residency in Cyprus

March 2017

The Cyprus Tax Authority’s new tax circular on the issuing of Tax Residency Certificates is expected to increase the demand and interest of investors and other parties for tax residency in Cyprus, Cyprus company formations and investments in Cyprus.

The circular, which was issued on the 10th of March 2017, states that a person wishing to become a tax resident of Cyprus can apply and get a Tax Residency Certificate at any time during a tax year even though he/she has not completed 183 days in the Republic of Cyprus within the current tax year.

The Tax Residency Certificate will be issued to a person as long as he/she registers with the Tax Department, obtains a Tax Identification number and submits a declaration signed by him/her stating that he/she intends to stay in Cyprus for one or more periods exceeding in aggregate 183 days in the tax year.

This is a very attractivetool for investors and other interested parties because they will be able to obtain Cyprus Tax Residency and immediately get a Tax Residency Certificate that will allow them to benefit from the tax treaties agreed by Cyprus at the time they receive income without being subject to any withholding of tax at source.  In addition they will enjoy all the other benefits that the Cyprus tax system has to offer.  With this procedure they will also have flexibility with how to plan their stay on the island so as to meet the 183 days requirement.

Becoming a tax resident of Cyprus has many benefits both for individual investors as well as for their companies if they choose to transfer them to Cyprus or proceed with the formation of a new company in Cyprus.

Contact Us NOW to Start the Process

Cyprus has an attractive and transparent tax regime, is fully compliant with EU, OECD and international laws and regulations. Cyprus provides access to an extensive network of more than 60 Double Tax Treaties while maintaining a corporate tax rate of 12.5%, which is one of the lowest in the EU.  Cyprus is an attractive place for international investors to invest, to set up their business or form a new company that will grow and prosper.

Some of the main features of the Cyprus tax system:

  • Dividend participation exemption
  • Profits from the trading and disposal of securities (e.g. shares, bonds, debentures) are tax exempt
  • No succession taxes
  • No withholding taxes
  • Individuals who take up residence in Cyprus can apply for non-domicile status which offers significant tax advantages
  • No tax on worldwide dividends and interest income for a period of 17 years for non-domiciled individuals
  • 50% exemption on income from employment in Cyprus for a person who was not previously resident in Cyprus. The exemption applies for ten years, if the income from employment in Cyprus exceeds €100.000 per annum.
  • 20% exemption with a maximum amount of €8.550 annually on income from employment in Cyprus of a person who was not previously resident in Cyprus. For employments commencing during or after 2012, the exemption applies for a period of 5 years starting from the tax year following the year of commencement of the employment with the last eligible tax year being 2020.
  • Low social insurance contributions (7.8% of gross salary) – total employer contributions to various funds amount to 11.5% of gross salaries and total employee contributions to 7.8%.
  • Tonnage Tax for shipping companies
  • Attractive IP regime
  • Notional interest deduction scheme

Contact one of our officers NOW to get more information about the procedure to obtain Cyprus Tax Residency and a Tax Residency Certificate, the benefits of the Cyprus Tax system or to initiate the incorporation of a Cyprus registered company and start reaping the full benefits of an onshore, low-tax, EU jurisdiction.

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