Telecoms & Satellite Communications Guide Cyprus

CyprusProfile Digital Series
Telecoms & Satellite Communication
Key Features of the Cyprus Tax System
w Simple, transparent and EU
harmonised tax system following
recommended OECD practices
w Enjoys the tax benefits of EU
Directives (Parent – Subsidiary
Directive, Merger Directive and
Interest and Royalties Directive)
w Extensive Tax Treaty network
with 66 countries
w A corporate income tax rate of
12.5%, one of the lowest within
the EU with possibility to enjoy
a much lower effective tax rate
w Availability of a Notional Interest
Deduction for companies
receiving new equity funding.
The tax deduction can reach up
to 80% of the taxable income
generated by the new equity
w IP Box regime based on the
nexus approach which allows
80% deemed deduction on
qualifying profits from the
business use of qualifying IP
w Attractive Tonnage Tax (TT)
regime for ship owners,
managers and charterers
w Attractive tax jurisdiction
for funds and attractive tax
regime for fund managers
w Capital gains are exempt
from tax (except for capital
gains arising from the
disposal of immovable
property located in Cyprus)
w Profits of a foreign Permanent
Establishment exempt from tax
w Gains from trading in securities
(shares, bonds and certain
other financial instruments)
are exempt from tax
w Unilateral credit relief
for foreign taxes
w No withholding tax on dividend,
interest or royalty payments
(for use of royalties outside
of Cyprus) made abroad
w No taxes on entry and on
qualifying reorganisations
w Carry forward of tax
losses for five years
w Tax incentives for expatriate
employees taking up
employment in Cyprus
(20%/50% exemption)
w Dividend income and interest
income are exempt from SDC
for non-domiciled individuals
taking up tax residency in Cyprus
w Possibility to obtain Cyprus
tax residency by spending
only 60-days in Cyprus
(subject to conditions)
w No inheritance tax
w No immovable property tax
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