Corporate income tax in Cyprus is calculated based on the following methodology:
- Determine the company's taxable income by subtracting allowable expenses from total revenue.
- Apply the applicable corporate tax rate to the taxable income to calculate the tax liability.
- Deduct any eligible tax credits or incentives to arrive at the final tax payable.
Taxable income for corporations in Cyprus includes:
| Taxable Income (EUR) | Tax Rate (%) |
|---|---|
| Up to 12,500 | 12.5% |
| 12,501 - 50,000 | 12.5% |
| 50,001 - 170,000 | 12.5% |
| Over 170,000 | 12.5% |
- Business profits
- Capital gains
- Rental income
- Dividend income (in certain cases)
- Interest income (in certain cases)
- Royalty income (in certain cases)
Certain types of income are exempt from corporate income tax in Cyprus, including:
- Dividends received from a foreign subsidiary (subject to conditions).
- Profits from the sale of securities.
- Certain capital gains (e.g., from the disposal of immovable property outside Cyprus).
The main legislation governing corporate income tax in Cyprus is the Income Tax Law (Law 118(I)/2002) and subsequent amendments.
- Tax Rates: Article 4 of the Income Tax Law.
- Taxable Income: Articles 5 and 6 of the Income Tax Law.
- Exemptions: Articles 8 and 9 of the Income Tax Law.
The corporate income tax system in Cyprus aims to provide a competitive tax environment for businesses while ensuring fairness and compliance with international tax standards. The tax legislation is regularly updated to reflect changes in economic conditions and government policies, promoting investment and economic growth.
⛰️
Access Heavnn's blend of professional expertise and cutting-edge technology by clicking the button below.
