Taxation of Companies in Cyprus
The worldwide income of an international business company is taxable in Cyprus, provided that the company is a Cyprus Tax Resident Company.
1. A Cyprus Tax Resident Company is one that its management and control is exercised in Cyprus or
2. It is considered Cyprus Tax Resident Company due to its registration under the Cyprus Companies Law, unless the relevant to each case Double Tax Avoidance Convention stipulates otherwise.
Corporation tax
As from the tax year 2026, Cyprus Tax Resident Companies are taxed at 15% on their worldwide profits.
Generally there are is no tax payable when a Cyprus tax resident company makes payment for dividends, interest and royalties to overseas tax residents. There are withholding taxes in certain cases where Royalties are used within Cyprus and in the cases where Low tax and Non Cooperative Jurisdictions are involved on the recipient side.
Other taxes
Please be advised of other taxes and VAT for your particular circumstances.
Double tax treaties
Cyprus has concluded double tax treaty agreements for the avoidance of double taxation of the same income with around 56 countries.
Tax incentives for companies
Various tax incentives exist for companies as follows:
1. Certain dividends receivable are tax free.
2. Gain on disposal of certain titles (eg shares, bonds and other similar financial instruments) are exempt from taxes.
3. Deduction from taxable income of Notional interest expense calculated on new capital introduced and associated with assets producing taxable income.
4. Deduction from taxable income of a certain development expense, for companies which own Intellectual Property, which was developed mainly by the company.
5. Deduction from taxable income of an additional 20% deemed expense in relation to certain scientific research and research & development expenses.
Tax incentives for individuals coming from overseas
Please see the separate caption for the above, where you can find amazing tax incentives for
1. Employment income.
2. Exceptions for certain other incomes of individuals who become Cyprus tax residents. You may find there that an individual may become Cyprus tax resident by completing certain conditions including staying in Cyprus for only 60 days.
Advice
As the above are not exhaustive, we shall be happy to provide advice and further clarity for your particular circumstances.
Sincerely Yours,
Marinos Koullapis FCCA
20th February, 2026