Incorporate.ltd

🇨🇾 Corporate Tax in Cyprus

Headline rate: 12.5%

Private Company Limited by Shares (Ltd)

Corporate profits are taxed at a flat 12.5% rate. The IP Box regime, aligned with the OECD modified nexus approach, provides an 80% deemed deduction on qualifying IP profits, resulting in an effective rate of 2.5%. The Notional Interest Deduction (NID) allows companies financed by equity to deduct a notional interest amount calculated on new equity introduced, reducing the effective tax burden further. Cyprus imposes no withholding tax on dividends paid to non-residents (subject to certain conditions), and no withholding tax on interest or royalty payments to non-residents. Capital gains are exempt from tax except on disposals of immovable property in Cyprus. The participation exemption ensures dividends received from subsidiaries are tax-free where the parent holds at least 1% of the subsidiary. Group relief is available for 75%-owned Cyprus-resident companies.

Public Company Limited by Shares (PLC)

Public limited companies are subject to the same 12.5% corporate tax rate as private companies. All IP Box, NID, participation exemption, and withholding tax provisions apply equally. Listed companies may face additional regulatory requirements from CySEC but no additional tax burden. The same group relief and loss carry-forward provisions apply.

Key Facts

  • Double tax treaties: 67
  • Memberships: EU, WTO, Eurozone, UN, Commonwealth
  • Legal system: Common law (based on English law)
  • Fiscal year: Calendar year

This content is educational and does not constitute legal or tax advice. Always consult a qualified professional for your specific situation. Data last verified March 2026.