Savva & Associates’ expertise in the international business environment enables our staff to offer a comprehensive set of services targetted specifically at professional intermediary firms, and offering individually customized solutions that can be tailored to any specific need.

Savva & Associates offers guidance and advice in international tax planning, tax management, international VAT, as well as Cyprus local tax and VAT matters.

We offer Cyprus and international strategies, tailor-made to the needs of our clients and designed to legally enhance your business, taking into consideration all applicable taxes - corporate or personal, and taxable gains as a result of Business tax, Inheritance tax, Capital gains tax, VAT and other related tax.

We can efficiently and precisely set out a strategy to mitigate your ongoing liability both in Cyprus and internationally, taking into account the bigger picture.

In short, we have the knowledge and expertise to solve your international multi-jurisdictional tax issues in a timely, cost effective, straight-forward and matter-of-fact way.

Tax Planning via Cyprus

Cyprus is consistently voted as one of the most attractive European tax regimes by major business organizations and tax professionals across Europe.

Cyprus, a premier holding, finance, royalty and trading company jurisdiction, has been commended for the stability of its tax law, the consistency in interpreting its tax legislation and its low tax and VAT rates.

In summary, Cyprus is among the lowest-tax EU onshore jurisdictions. The standard corporate tax rate of 12,5% is among the lowest in the European Union, and the lowest “non-offshore jurisdiction corporate tax rate” in the world. 

Cyprus does not apply any withholding taxes for payments of dividends and interest by Cyprus tax residents to non-Cyprus tax residents. There is also no withholding tax on royalties granted for use outside of Cyprus.

Cyprus boasts an extensive network of double tax treaties and is commonly cited as the preferred jurisdiction for routing investment into:

  1. European Union: Cyprus is commonly referred to as the gateway to doing business in the EU. It is chosen by investors in the USA, Canada, China, Russia, and other jurisdictions for structuring investment into the EU. Through the use of the EU Parent-Subsidiary Directive and the EU Interest and Royalties Directive, a Cyprus Holding, Trading or Finance company is the most effective vehicle for doing business in the EU.
  2. Eastern Europe: Cyprus has historically been the primary choice for routing investment in Eastern Europe, namely Bulgaria, the Czech Republic, Hungary, Poland and Romania.
  3. China: Cyprus is commonly used in the international tax strategies of globalizing Chinese companies and companies looking to expand into China.
  4. CIS Countries: Most CIS countries apply the USSR/Cyprus treaty of 29 October 1982 (0% withholding on payments of dividend, interest and royalties).
  5. Russia: Cyprus is statistically the top foreign investor in Russia. Dividens paid from Russia to Cyprus are only subject to a withholding tax of 5%.
  6. Other jurisdictions: Cyprus is commonly used to route foreign investment into the Near and Far East, as well as Africa.

Cyprus Double Tax Treaties

The following table summarizes the withholding tax rates that may be deducted from income received by a Cyprus tax resident from a resident of a country that has signed a tax treaty with Cyprus: 

Received in Cyprus
DividendsInterestRoyalties
%%%
Non-treaty countries
1Andorra (31)000
2Armenia0 (32)5 (33)5
3Austria10 (46)00
4Azerbaijan (27)000
5Bahrain000
6Barbados000
7Belarus5 (4)55
8Belgium10 (1) (46)10 (16) (46)0
9Bosnia (28)101010
10Bulgaria5 (19) (46)7 (25) (46)10 (20) (46)
11Canada1515 (8)10 (11)
12China101010
13Czech Republic0 (30) (46)010
14Denmark0 (34)00
15Egypt151510
16Estonia000
17Ethiopia55 (8)5
18Finland5 (37) (46)00
19France10 (7) (46)10 (9) (46)0 (26)
20Georgia000
21Germany5 (2) (46)00
22Greece25 (46)10 (46)0 (12)
23Guernsey000
24Hungary5 (1) (46)10 (8) (46)0
25Iceland5 (39)05
26India1010 (8)10
27Iran5 (19)56
28Ireland000 (12)
29Italy15 (46)10 (46)0
30Jersey000
31Kuwait1010 (8)5 (14)
32Kyrgyzstan (27)000
33Latvia0 (42)0 (42)0 (43)
34Lebanon55 (16)0
35Lithuania0 (40)05 (46)
36Luxembourg (31)0 (35)00
37Malta0 (22)10 (8) (46)10
38Mauritius000
39Moldova5 (19)55
40Montenegro (28)101010
41Norway0 (3)00
42Poland0 (36)5 (8) (46)5 (46)
43Portugal10 (46)10 (46)10 (46)
44Qatar005
45Romania10 (46)10 (8) (46)5 (14) (46)
46Russia5 (6)00
47San Marino000
48Saudi Arabia (31)0 (44)05 (45)
49Serbia (28)101010
50Seychelles005
51Singapore010 (23)10
52Slovakia (29)10 (46)10 (8) (46)5 (14) (46)
53Slovenia5 (46)5 (33) (46)5(46)
54South Africa10 (41)00
55Spain0 (35)00
56Sweden5 (1) (46)10 (8) (46)0
57Switzerland0 (38)00
58Syria0 (1)10 (8)15 (13)
59Thailand1015 (17)5 (18)
60Ukraine5 (21)25 (15)
61United Arab Emirates000
62United Kingdom (31)0 (24)00
63United States of America5 (5)10 (10)0
64Uzbekistan (27)000

1. 15% if received by a company controlling less than 25% of the voting power

2. 5% if received by a company controlling more than or equal to 10% of the capital. 15% in all other cases.

3. NIL if the beneficial owner is a company (other than a partnership) which holds directly at least 10% of the capital of the company paying the dividend. 15% in all other cases.

4. 5% if the amount invested by the beneficial owner is over €200.000 irrespective of the % of voting power acquired. 10% is imposed if received by a holder of at least 25% of the share capital of the paying company. Otherwise the rate is 15%.

5. 5% if received by a company controlling at least 10% of the voting power. 15% in all other cases.

6. 10% if received by company, which has invested less than €100.000.

7. 10% if received by a company controlling more than or equal to 10% of the capital. 15% in all other cases.

8. NIL if paid to the Government of the other State.

9. NIL if paid to the Government of the other State or in connection with the sale on credit of any industrial, commercial or scientific equipment or any merchandise by one enterprise to another or in relation to any form of loan granted by a bank or is guaranteed from government or other governmental organisation.

10. NIL if paid to the Government of the other State, to a bank or a financial institution or in respect to debt obligations arising in connection with sale of property or the provision of services.

11. NIL on literary, dramatic, musical or artistic work with the exception of films used for television programs.

12. 5% on film royalties (except films shown on TV).

13. 10% on literary, musical, artistic work, films and TV royalties.

14. NIL on literary, artistic or scientific work including films.

15. 5% on royalty payments in respect of any copyright of scientific work any patent, trade mark, secret formula, process or information concerning industrial, commercial or scientific experience. 10% in all other cases.

16. NIL if paid to the Government of the other State, a political subdivision or a local authority, the National Bank or any institution the capital of which is wholly owned by the State or a political subdivision or a local authority or in the form of interest income from bank deposits.

17. 10% on interest received by financial institutions, on interest paid in connection with industrial, commercial, scientific equipment or the sale or merchandise between two companies.

18. 10% on right to use industrial, commercial or scientific equipment or for information concerning industrial, commercial or scientific experience and 15% for patents, trademarks, designs, models, plans, secret formulas or processes.

19. 5% if the dividend is received by a company owning directly at least 25% of the capital of the company paying divided. 10% in all other cases.

20. This rate does not apply, where 25% or more of the capital of the Cypriot resident is owned directly or indirectly by the Bulgarian resident paying the royalties and the Cyprus company pays less than the normal rate of tax.

21. 5% is applicable if the dividend is received by a company owning at least 20% of the capital of the dividend paying company or has invested in the acquisition of shares or other rights of the dividend paying company of at least €100.000. 15% in all other cases.

22. The treaty provides that the tax on the gross amount of the dividends shall not exceed that chargeable on the profits out of which the dividends are paid.

23. 7% if paid to a bank or similar financial institution. NIL if paid to the government.

24. The treaty provides for 15% withholding tax for dividends paid by certain investment vehicles out of income derived, directly or indirectly, from tax exempt immovable property income.

25. NIL if paid to or is guaranteed by the Government, statutory body, the Central Bank.

26. 5% on film royalties, including films used for television programs.

27. The treaty between the Republic of Cyprus and the United Soviet Socialist Republic still applies.

28. The treaty between the Republic of Cyprus and the Socialist Federal Republic of Yugoslavia still applies.

29. The treaty between the Republic of Cyprus and the Czechoslovak Socialist Republic still applies.

30. NIL if the beneficial owner is a company (other than a partnership) which holds directly at least 10% of the capital of the company paying the dividends where such holding is being possessed for an uninterrupted period of not less than one year. 5% in all other cases.

31. The treaty is effective from March 1st 2019 and applied on taxes from 1st January 2020 onwards.

32. 5% if the beneficial owner has invested in the capital of the company less than the equivalent of €150.000 at the time of the investment.

33. NIL if paid to the Government or to a local authority, or to the Central Bank.

34. NIL if the beneficial owner is a company (other than a partnership) which holds directly at least 10% of the capital of the company paying the dividends, where such holding is being possessed for an uninterrupted period of no less than 12 months.

NIL if the beneficial owner is the other Contracting State or the Central Bank of that other State, or any national agency or any other agency (including a financial institution) owned or controlled by the Government of that other State.

NIL if the beneficial owner is a pension fund or other similar institution providing pension schemes in which individuals may participate in order to secure retirement benefits, where such pension fund or other similar institution is established, recognized for tax purposes and controlled in accordance with the laws of that other State. 15% in all other cases.

35. NIL if the dividend is received by a company (other than a partnership) holding at least 10% of the capital of the dividend paying company. 5% in all other cases.

36. NIL if the beneficial owner is a company (other than a partnership) which holds directly at least 10% of the capital of the company paying the dividends, where such holding is being possessed for an uninterrupted period of no less than 24 months. 5% in all other cases.

37. 5% if the dividend is received by a company (other than a partnership) which controls directly at least 10% of the voting power in the company paying the dividends. 15% in all other cases.

38. NIL if the beneficial owner is:

a.)  a company (other than a partnership) the capital of which is wholly or partly divided into shares and which holds directly at least 10% of the capital of the company paying the dividend for an uninterrupted period of at least one year.

b.) a pension fund or other similar institution recognised as such for tax purposes, or

c.) the Government, a political subdivision, local authority or central bank of one of the two contracting states. 15% in all other cases.

39. 5% if the beneficial owner is a company (other than a partnership) which holds directly at least 10% of the capital of the company paying the dividends. 10% in all other cases.

40. NIL if the beneficial owner is a company (other than a partnership) which holds directly at least 10% on the capital of the company paying the dividends. 5% in all other cases.

41. 5% if the dividend is received by a company which holds at least 10% of the capital of the company paying the dividend. 10% in all other cases.

42. NIL if the beneficial owner is a company (other than a partnership). 10% in all other cases.

43. NIL if the beneficial owner is a company (other than a partnership). 5% in all other cases.

44. NIL if the beneficial owner is a company which holds directly or indirectly at least 25% of the capital of the company paying the dividends. 5% in all other cases.

45. 5% on royalties for the use of, or the right to use, industrial, commercial or scientific equipment. 8% in all other cases.

46. An exemption from withholding tax on dividends may be available if the conditions for the application of the EU parent-subsidiary directive are satisfied. An exemption from withholding tax on interest may also be available if the conditions for the application of the EU interest and royalties directive are satisfied.

Free Expert Check!

Get FREE tax guidance from our experts when considering the use of a Cyprus company in a particular structure. We would be pleased to provide you with our initial comments and guidance on your tax planning free of any charges or obligations. Email us at info@savvacyprus.com and one of our team members will contact you within the next 24 hours to arrange a Free Expert Check.

Pop up small