Tax system

A uniform 12.5% Corporate Tax rate, applies to both local and international companies. In addition, there is (a) the Special Contribution for Defence which is imposed on income earned by Cyprus tax residents, (b) the Capital Gains Tax at the rate of 20% on gains from the disposal of immovable property situated in Cyprus and from the disposal of shares in companies which own such immovable property excluding shares listed in the stock exchange, (c) Value Added Tax at the rate of 15%, (d) other taxes such as Land Transfer fees. However, one should note that a wide set of rules and exemption are applicable.

Also, it must be observed that the 12.5% corporate tax is one of the lowest rates in the European Union.

Cyprus has entered into a considerable number of double-tax treaties (unusual for a low-tax jurisdiction). The general effect of these treaties is Cyprus resident individuals or legal entities are not taxed more than once on the same income.