Cyprus has a very advanced tax planning culture based on an extensive double taxation treaties network. In recent years and further to the ascension of Cyprus into the European Union a large number of international structures involve a Cypriot company. Cyprus at present features the lowest fixed corporate tax rate (10%) in the European Union and a very competitive V.A.T. rate (15%).

Cyprus Double Tax Treaties Network

Cyprus has concluded an impressive number of treaties for the avoidance of double taxation. Along with the low corporate tax rates and the special provisions for holding companies, the Cyprus companies provide an excellent vehicle for effective international tax planning. The useful table provided here gives a guide to the reader as far as withholding taxes paid from and to Cyprus are concerned.

International Trusts in Cyprus

The Cyprus International Trust provides excellent opportunities for tax planning purposes. According to the Cyprus International Trust law all proceeds from the income received in a Cyprus International Trust are not taxable. Cyprus International Trust law provides that the Trustee must be a resident of Cyprus and that all assets that a Cyprus Trust holds must be located outside Cyprus.

Cyprus Holding Companies

A Cyprus holding company enjoys not only tax advantages but also the status of being located at a reputable business centre. With EU accession in May 2004 the status of a Cyprus holding company has been enhanced further as it enjoys the reputation and privileges attached to a European company.