Cyprus tax residence

  • A company is taxed if it is a resident of Cyprus.
  • A company is resident if its management and control is in Cyprus. The incorporation of a company in Cyprus is not sufficient to establish residence.
  • Although the term "management and control" is not defined in the legislation, it is generally understood to mean the place where the board meetings take place or where the majority of the board members reside.
  • A company which is resident is taxed in Cyprus on its worldwide income.
  • Such income includes profit from business activities such as trading, manufacturing, industrial, mining, agricultural, profession or vocation, interest, rentals from immoveable property, royalties and profit from sale of goodwill. Foreign taxes paid are credited against Cyprus tax paid on the same income.
  • A company which is non-resident, will only be taxed on its profits arising from a permanent establishment in Cyprus. The term "permanent establishment" basically includes an office, a branch, a factory or laboratory, a mine, an oilfield, or a construction site for a project exceeding three months. Rental from immoveable property located in Cyprus and profit from sale of goodwill in Cyprus is also taxable irrespective of the existence of a permanent establishment.

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