Question 1

What is the corporate income tax rate in Cyprus?

Accepted Answer

Cyprus has a favourable corporate tax rate of 12.5%.

Question 2

Is there personal income tax in Cyprus?

Accepted Answer

Yes. Cyprus uses a progressive income tax system with rates up to ~35%, depending on income.

Question 3

What tax registration is needed when starting a business in Cyprus?

Accepted Answer

You must register your company with the Cyprus Tax Department to obtain a Tax Identification Number (TIN) and comply with local tax obligations.

Question 4

What is the Tax Year in Cyprus for Corporate Taxes?

Accepted Answer

The tax year in Cyprus follows the calendar year, beginning on January 1st and ending on December 31st.

Question 5

What is the role of an auditor in tax planning and compliance?

Accepted Answer

An auditor can review your financials, ensure accurate reporting, identify tax risks, and help optimise your tax position.

Question 6

How often do I file corporate tax returns in Cyprus?

Accepted Answer

Annual corporate tax returns are required to be submitted electronically by 31st March of the second year following the tax year.

Question 7

How is capital gains tax (CGT) applied in Cyprus?

Accepted Answer

CGT in Cyprus typically applies to gains from the disposal of immovable property located in Cyprus at a flat rate of 20%.

Question 8

What kinds of records do I need to keep for tax purposes?

Accepted Answer

You should retain invoices, contracts, bank statements, and supporting documentation for your income and expenses for at least six years.

Question 9

What happens if I don’t pay my taxes on time?

Accepted Answer

Late payments may incur interest and penalties. Persistent non-compliance can lead to audits or further sanctions.

Question 10

What is double taxation, and does Cyprus have double tax treaties?

Accepted Answer

Double taxation occurs when the same income is taxed in two countries. Cyprus has double tax treaties with more than 60 countries, helping to reduce or eliminate double taxation.

Question 11

How do cross-border transactions affect my Cyprus tax obligations?

Accepted Answer

International client work, royalties, or intra-group transactions may trigger transfer pricing, withholding taxes, or other cross-border tax considerations.

Question 12

Can Cyprus tax residency status change my personal tax position?

Accepted Answer

Yes. If you become a tax resident in Cyprus, your worldwide income may be subject to Cyprus tax, but you may also benefit from favourable tax regimes, depending on your structure.

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