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Taxes - Cyprus

Updated 08/2009

Legal requirements

Tax system

Companies are taxed under the income tax act, as amended, and taxes are collected according to the assessment and collection of tax act, applicable to both natural persons and legal entities (corporate tax).

  • Income Tax Actpdfελληνικά

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.

Direct taxes

All companies are subject to corporation tax at a uniform rate of 10%, excuding semi-public institutions for which the rate is 25%.

Profits and share dividends paid by a shipping company registered in Cyprus or with ships flying the Cypriot flag and carrying out its activities in international waters are exempt from income tax.

Cypriot or international companies (individuals or legal entities) that manage     ships or ships' crews may elect to be taxed at a rate of 4.25% or at tax rates equal to 25% of the tonnage of the foreign ships which are under their management and registered outside Cyprus.

Cyprus has signed 32 conventions regarding the avoidance of double   taxation covering 40 countries.

Indirect taxes

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.

Administrative procedures

Tax registration

Every company and natural person subject to tax liabilities under relevant legislation is also required to register with the Inland Revenue as soon as possible in order to receive a Tax Identification Number (T.I.N.).

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 Department of the Registrar of Companies and Official Receiver (D.R.C.O.R) of the Republic of Cyprus.

Submission of tax return form

Every company must submit a Company Tax Return no later than 31/12 in the year following the fiscal year to which the income specified can be attributed.

Natural persons   who fall under the above provisions, must submit a Self-Employment Tax Return, where appropriate, while every company or natural person employing at least one person must submit an Employer's Declaration to the Inland Revenue Department.

Legal entities   are required to submit a provisional tax return by August 1 of the current financial year, and to submit a tax return together with audited accounts from certificied accountants by 31 December of the following year.

  • Administrative Regulation 29.1997pdf [349 KB] ελληνικά
  • Administrative Regulation 179.1997pdf [2 MB] ελληνικά
  • Administrative Regulation 108.2005pdf [2 MB] ελληνικά

Every month, the company/employer deducts the tax according to the annual income of each employee from the employees' salary and submits the employer's declaration by 30 April of the following year. A person registered for VAT must submit a VAT return for the tax period specified. Usually the tax period is quarterly.

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 also be submitted electronically.

Resources

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.

  • VAT Departmentελληνικά

Check also the legislation on this topic in:

  • References

    Legal texts

    • The Income Tax 230(I) Act of 2002pdfελληνικά
    • The Capital Gains Tax Act (No. 52/1980, as amended)pdfελληνικά
    • The Property Tax Act (No. 24/1980, as amended)pdfελληνικά
    • The Emergency Defence Contribution Acts of 2002 to 2009pdf [610 KB] ελληνικά
    • The Stamp Duty Act (No. 19/1963, as amended)pdf [2 MB] ελληνικά
    • The Assessment and Collection of Tax Act (No. 4/1978, as amended)pdfελληνικά
    • The Value Added Tax Acts of 2000-2009 and Regulationsελληνικά

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Further help

Registration under the Value Added Tax registry may also be carried out through the One Stop Shop of the Department of the Registrar of Companies and Official Receiver (D.R.C.O.R) of the Republic of Cyprus.

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