Cyprus: Tax

This country-specific Q&A provides an overview of Tax laws and regulations applicable in Cyprus.

  1. How often is tax law amended and what is the process?

  2. What are the principal administrative obligations of a taxpayer, i.e. regarding the filing of tax returns and the maintenance of records?

  3. Who are the key tax authorities? How do they engage with taxpayers and how are tax issues resolved?

  4. Are tax disputes heard by a court, tribunal or body independent of the tax authority? How long do such proceedings generally take?

  5. What are the typical deadlines for the payment of taxes? Do special rules apply to disputed amounts of tax?

  6. Are tax authorities subject to a duty of confidentiality in respect of taxpayer data?

  7. Is this jurisdiction a signatory (or does it propose to become a signatory) to the Common Reporting Standard? Does it maintain (or intend to maintain) a public register of beneficial ownership?

  8. What are the tests for determining residence of business entities (including transparent entities)?

  9. Do tax authorities in this jurisdiction target cross border transactions within an international group? If so, how?

  10. Is there a controlled foreign corporation (CFC) regime or equivalent?

  11. Is there a transfer pricing regime? Is there a "thin capitalization" regime? Is there a "safe harbour" or is it possible to obtain an advance pricing agreement?

  12. Is there a general anti-avoidance rule (GAAR) and, if so, how is it enforced by tax authorities (e.g. in negotiations, litigation)?

  13. Is there a digital services tax? If so, is there an intention to withdraw or amend it once a multilateral solution is in place?

  14. Have any of the OECD BEPS recommendations, including the OECD’s recent two-pillar solution to address the tax challenges arising from digitalisation of the economy, been implemented or are any planned to be implemented?

  15. How has the OECD BEPS program impacted tax policies?

  16. Does the tax system broadly follow the OECD Model i.e. does it have taxation of: a) business profits, b) employment income and pensions, c) VAT (or other indirect tax), d) savings income and royalties, e) income from land, f) capital gains, g) stamp and/or capital duties? If so, what are the current rates and how are they applied?

  17. Is business tax levied on, broadly, the revenue profits of a business computed in accordance with accounting principles?

  18. Are common business vehicles such as companies, partnerships and trusts recognised as taxable entities or are they tax transparent?

  19. Is liability to business taxation based on tax residence or registration? If so, what are the tests?

  20. Are there any favourable taxation regimes for particular areas (e.g. enterprise zones) or sectors (e.g. financial services)?

  21. Are there any special tax regimes for intellectual property, such as patent box?

  22. Is fiscal consolidation permitted? Are groups of companies recognised for tax purposes and, if so, are there any jurisdictional limitations on what can constitute a tax group? Is there a group contribution system or can losses otherwise be relieved across group companies?

  23. Are there any withholding taxes?

  24. Are there any environmental taxes payable by businesses?

  25. Is dividend income received from resident and/or non-resident companies taxable?

  26. What are the advantages and disadvantages offered by your jurisdiction to an international group seeking to relocate activities?