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Tax implications for individual and corporate investors in Cyprus

Michalaki Pitsillidou Rozen Law Firm > English Articles  > Tax implications for individual and corporate investors in Cyprus

Tax implications for individual and corporate investors in Cyprus

The term individual investor refers to individuals who buy and sell securities for their personal account, and not for another company or organization. In contrasts, corporate investor refers to companies that invest in other companies.

 

Cyprus tax resident but not domiciled individual investors:

First, for tax on disposal, they are exempted from income tax, but for real estate Fund, 20% capital gains tax is applied in the case the Fund owns in Cyprus immovable property. They are benefited regarding tax on distribution of profits as they are exempted from income tax and SDC tax. Moreover, based on corporate income tax, they are charged income tax on worldwide income and progressive tax up to 35%. They may also get double tax relief based on a double tax treaty or unilaterally by Cyprus.

 

Cyprus tax resident and domiciled individual investors:

Additionally, they are also exempted from income tax but for real estate Fund, there is a 20% capital gains tax that applies in the case the Fund owns in Cyprus immovable property. They are exempted from income tax but they are required to pay 17% SDC tax for the distribution of profits. They also have to pay income tax on worldwide income and progressive tax up to 35%. More importantly though, they may be benefited by a double tax relief.

 

Cyprus tax resident corporate investors:

This type of corporate investors may face an exemption from income tax but for real estate Fund, they may have to pay 20% capital gains tax if the Fund owns in Cyprus immovable property. As opposed to the Cyprus tax resident and domiciled individual investors, Cyprus tax resident corporate investors will not pay for distribution of profit neither income tax nor SDC tax. Furthermore, they will have to pay income tax on worldwide income as well as 12.5% for flat corporate tax.

 

Non-Cyprus tax resident individual and corporate investors:

In addition, the same applies for these investors as it applies for the other types of investors we have seen above regarding tax on disposal. Indeed, they are exempted from income tax but for real estate Fund, they may have to pay 20% capital gains tax if the Fund owns in Cyprus immovable property. Moreover, they do not have to pay income tax or SDC tax for the distribution of profits. Also, regarding income tax they have to pay tax only on Cyprus sourced income. Finally, they may be given a double tax relief.

 

For more information and guidance please email Michalaki, Pitsillidou & Co LLC – iMPK Global Business Law Firm – Cyprus Lawyers, at info@impklawyers.com or visit our website at www.impklawyers.com.Tel. +357 25660092 – Fax +357 25 660097.

 

 

 

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