Companies are taxed under the Income Tax Act of 2002, N118(I)/2002, as amended, and taxes are collected according to the Assessment and Collection of Tax Act N4/78 as amended.
For self-employed people (natural persons with businesses and professionals) see the “Your Europe - Citizens” web page.
A company is deemed to have its tax domicile in Cyprus when its management and control are exercised in the Republic of Cyprus. Taxable income includes both domestic income and the income earned abroad. Companies that do not have their tax domicile in Cyprus are taxed only on their domestic income.
All companies are subject to corporation tax at a uniform rate of 10%.
Profits and share dividends paid by a shipping company as the term is defined in the Commercial Shipping Act (Fees and Tax Provisions) - 44(I)/2010, are exempt from income tax.
Cyprus has signed 45 conventions regarding the avoidance of double taxation covering 46 countries.
Value Added Tax (VAT) is levied on all taxable goods or services delivered or provided in Cyprus, with the exception of any transactions exempt from tax according to VAT legislation.
Any person involved in taxable supplies of goods, services, intra-Community acquisitions or distance sales must become registered under the VAT Register by submitting a relevant application to the competent VAT District Office before the passing of the relevant deadline from the creation of the obligation.
Every company established in the Republic and every foreign company registered pursuant to the Companies Act must, immediately after being established or registered, enrol with the Inland Revenue in order to receive a Tax Identification Number (T.I.N.).
For the purposes of the Income Tax Act, companies include not only those companies which come under the Companies act, but also any body (with or without a legal personality) or organisation governed by public law, as well as any society, fraternity or association of persons (with or without a legal personality) including any comparable company established or registered outside the Republic. It does not include cooperatives.
The aforementioned procedures can be performed either through the Income Tax District Offices, or through the One Stop Shops of the Ministry of Commerce, Industry and Tourism, irrespective of the type of activity the taxpayer is involved in.
Registration under the Value Added Tax registry may also be carried out through the One Stop Shop at the Ministry of Commerce, Industry and Tourism of the Republic of Cyprus.
Submission of tax return form
Every company must submit a Company Tax Return (I.R.4) based on selected accounts, no later than 31/12 in the year following the fiscal year to which the income specified can be attributed.
Companies which are required to submit their declaration (I.R.4) electronically are given a 3 month extension and should register with the Inland Revenue Department’s TAXISnet service.
Any company which has employees (at least one person) must submit the Employer’s Declaration (I.R.7) to the Inland Revenue Department by 30 April in the year following the tax year.
All employers must, every month, deduct a sum from employees’ wages which is proportionate to their annual income and must send this sum to the Inland Revenue Department.
Legal entities are required to submit a provisional income tax return (I.R.6) by August 1 of the current financial year.
Also, persons registered for VAT must submit a tax return for each quarterly tax period.
All the tax forms and other information are available from local offices of the Inland Revenue Department and the Department’s website. On many occasions, the tax return may/must be submitted electronically.
Businessmen may find all the information regarding their obligations on Value Added Tax as well as the relevant procedures at the VAT Department of the Ministry of Finance.