Tax Planning & Advising

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With Cyprus accession into the European Union, its tax legislation has changed in order to be in line with the European Union Law and the European Union code of conduct. The new regime abides by Cyprus’ commitment to the OECD to eliminate harmful tax practices initiatives against harmful tax practices. Thus as of the 1st of January 2003 the tax system in Cyprus underwent some major reforms, making it more attractive for Cyprus companies to play a role in international business models or in terms of establishing global or regional headquarters.

Cyprus has an advanced tax planning culture as it combines low or, in certain cases, zero tax rates with an extensive double taxation treaty network. The continued efforts of the government of Cyprus to expand and enhance its network of double taxation agreements by way of negotiations with new countries and update of  existing tax treaties has turned Cypriot companies into an essential part of large international structures.

The low fixed corporate tax rate (12,5%) and a competitive V.A.T. rate (19%) together with all the additional benefits provided by the Cyprus tax law in relation to Dividends, Interest and Royalties and EU Law (ie. the Parent Subsidiary Directive) make Cyprus companies more attractive in the following tax planning structures:

  • Holding Company
  • Trust Company
  • Finance Vehicle Company in order to finance other corporate entities
  • Trading Company
  • Royalty Company (in conjunction with the Patent box regime)
  • International investment schemes

Our team of tax experts advise clients on complex issues in the area of taxation, focusing on:

  • Tax efficiency of the operating model or structure,
  • Tax risk management, looking at substance requirements in order to protect clients from tax conflicts internationally,
  • Intra-group transaction review and pricing according to the set of rules applicable in each jurisdiction
  • Profit allocation within a Group of companies