ARTICLE · 29 SEPTEMBER 2017

Applying Substance In A Cyprus Company

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Cyprus as a jurisdiction is well known for its favorable tax regime with a strong transparent legal system and its compliance with the standards set up by the European Union (EU)...

CyprusTax

Michael Kourouklas

Cyprus as a jurisdiction is well known for its favorable tax regime with a strong transparent legal system and its compliance with the standards set up by the European Union (EU) and the Organization for Economic Cooperation and Development (OECD).

Under OECD model convention a Cyprus Company will qualify for benefiting the Double Taxation Treaties if the following criteria are met:

The Company is a tax resident of the state it is registered in; and
The Company is the beneficial owner of the income distribution (dividends royalties, interest).

In forming a Company in Cyprus, the entrepreneur will need to take into consideration with his tax consultant how "real" Substance will be implemented thus enabling him to enjoy the low tax rate of 12, 5% corporation tax in Cyprus.

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