International tax aspects play a significant role in all international business decisions. That’s why we continually monitor any changes in tax legislation in order to advise our clients how to maximise their tax benefits. Our specialists on Cyprus and international taxation know how to best take advantage of existing tax legislation of various jurisdictions and Double Tax Treaties’ provisions, and are ready to assist you in optimization of your new or existing business structures.
If you are considering using Cyprus entity in your tax planning, you probably already know that it has a number of advantages to both business entities and foreign private individuals, as the overall tax liability arising from an international activity can be mitigated or even completely eliminated.
Specifically, proper structuring of a Cyprus entity in an international tax plan can:
- Reduce the tax burden in the country where the income is earned
- Reduce the withholding tax on getting the money earned out of the country where the income is earned
- Reduce or defer the tax burden of the ultimate shareholder of the tax planning structure
- Reduce the overall tax burden of an international activity increasing in this way the overall return on investment of the project.
The Cyprus fiscal legislation offers a number of incentives that give rise to the above advantages:
- Introduction of the concept of tax resident and non-resident companies
- Taxation of worldwide income for tax residents and Cyprus sourced income for non-residents
- Lowest corporate tax rate in the European Union of 12.5%
- Tax-exempt business profits of non-resident companies
- Tax-exempt gains on the trading and disposal of securities
- Tax-exempt gains on the disposal of subsidiaries
- Tax-exempt dividend income (subject to applicable criteria)
- Tax-efficient group reorganizations
- Tax relief for group losses
- Full adoption of the EU Parent-Subsidiary Directive, EU Mergers Directive and EU Royalty and Interest Directive
- Extensive network of double tax treaties
If you are willing to take advantage of the above benefits, or would like to consider other tax solutions please do not hesitate to contact PENAP Group. We will work together with you to offer you a personalized and flexible approach to handle all your requirements.