Taxation
Taxation
Taxation in Cyprus
Taxation in Cyprus is a key aspect of living and doing business on the island. Understanding the tax system can help you make informed financial decisions.
Income Tax
In Cyprus, individuals are subject to income tax on their worldwide income if they are residents. Non-residents are taxed only on income earned in Cyprus. The tax rates are progressive, ranging from 0% to 35%.
Corporate Tax
Cyprus offers a competitive corporate tax rate of 12.5%, one of the lowest in the European Union. This low rate makes Cyprus an attractive destination for businesses. Companies are taxed on their worldwide income if they are managed and controlled in Cyprus.
Value Added Tax (VAT)
The standard VAT rate in Cyprus is 19%. However, there are reduced rates of 9% and 5% for certain goods and services. Some items, like medical supplies and books, may be exempt from VAT.
Special Defence Contribution
The Special Defence Contribution (SDC) is a tax on certain types of income, such as dividends, interest, and rental income. The rates vary, with dividends taxed at 17%, interest at 30%, and rental income at 3%.
Double Taxation Treaties
Cyprus has signed double taxation treaties with many countries. These treaties prevent individuals and businesses from being taxed twice on the same income. They also provide clarity on which country has the right to tax specific types of income.
Conclusion
Understanding taxation in Cyprus is crucial for both residents and businesses. The island offers attractive tax rates and a comprehensive network of double taxation treaties, making it a favorable location for financial planning and business operations.
Blog Posts with the term: Taxation
The article outlines significant tax changes in Cyprus for 2024, including adjustments to individual income tax brackets and exemptions, corporate tax reforms, social insurance contributions, capital gains tax rules, land transfer fees, stamp duty rates, special defence contribution updates, VAT...
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