We have thorough expertise in advising and assisting clients with the implementation of effective tax planning structures, designed to: minimize tax liabilities; improve efficiency of the clients’ international cross-border activities and meet their financial and business objectives. Through our association with the Fullserve Group we are able to secure the provision of company secretarial, trustee, administration, and management services to individuals or companies.
Consulting and assistance for the creation of tax effective solutions using Double Tax Treaties and other tax relevant legislation. Set up tax efficient structures with corporate entities, branches, partnerships and trusts which can access the benefits of double tax treaties.
A tax resident is defined by the law as a person who is in Cyprus for more than 183 days per calendar year. A legal entity is considered to be a tax resident if the management and control of the entity is exercised in Cyprus. Management and control suggests, among other factors, that the majority of the members of the Board of the Directors are resident in Cyprus and that the important decisions by the Board are taken in the Republic.
The Corporate Tax rate is currently at 12.5% and dividend income of resident individuals is subject to Special Defence Contribution at the rate of 20%, which is withheld at source if received from Cyprus Resident Companies. The Dividend income from abroad, if earned by resident persons, will be treated in the same way as dividend from sources in Cyprus. In this case the Special Defence Contribution will not be withheld at source and thus the resident person has to declare the dividend in order to be assessed. Relief for Double Taxation will be given as for any other foreign income.
TAXES RELATING TO PROPERTY
Land Registry Fees
Land Registry fees are levied on the purchaser by the Department of Land and Surveys upon the transfer of immovable property and are as follows:
A transfer subject to VAT is exempt from the above transfer fees
A transfer not subject to VAT will be eligible for a 50% exemption from the above transfer fees.
In transactions involving the purchase of new property from first –time buyers the buyers have the right to apply for a reduced rate of VAT of 5% rather than 18%, which is the current VAT level in Cyprus. In order to apply for the reduced rate of 5%VAT and to qualify for reduced VAT rate the applicant must meet the following criteria:
Capital Gains Tax
Tax is imposed on any gain from the disposal of property situated in Cyprus at the rate of 20%. The first € 17086,01 (or € 85.430,07 in the case of one’s private residence) is exempt.
The Stamp Duty legislation has been amended on the 17th of December 2012 by the Stamp Duty (Amending) Law of 2012, Law No. 173(I)/2012, amending the provisions of the Cyprus Stamp Duty law of 1963 to 2007.
The amended legislation in in effect since the 1st of March 2013.
Agreements specifying a fixed amount:
For all agreements and/or memorandum of agreements and/or all documents forming any agreement specifying any fixed amount, the stamp duty is calculated on the basis of the contract value stated within the document in the following manner:
Agreements not specifying a fixed amount:
For agreements and/or memorandums of agreement and/or all documents forming an agreement in which no fixed amount is specified the stamp duty payable is €34,00. On contracts with value between €1.00 – €5.000, the value of the stamp duty is zero.
Penalties where the stamp duty is not paid within 30 days from execution in Cyprus:
If the stamp duty is paid within six months after execution then for the unpaid stamp duty not exceeding €2.00, the unpaid amount must be paid plus €2.00;
For the unpaid stamp duty exceeding €2.00 but being less than €35.00, the unpaid amount is payable plus a penalty of €35.00; and
For the unpaid stamp duty exceeding €35.00, the unpaid amount is payable plus 10% on the amount of the stamp duty which exceeds €35.00.
If the stamp duty is paid after the expiration of six months from execution, the unpaid stamp duty is payable, plus double the amounts of the penalties specified above.