VAT & other Cyprus tax matters


Double Tax Treaties
Cyprus has an extensive network of Treaties for the avoidance of Double Taxation with over 40 countries.
The following tables show the rates of withholding tax deducted from income, with countries that have signed a double taxation treaty with Cyprus.


Company Re-Organizations
The transfer of assets and liabilities between companies can be affected without any tax consequences within the framework of a re-organization which includes: Mergers / Demergers / Transfer of activities / Exchange of shares.


Value Added Tax (VAT)

Value Added Tax was introduced in Cyprus on 1 July 1992 and is imposed on the provision of goods and services as well as on the importation of goods into Cyprus.


Standard rate – 17% from 1 March 2012 (Previously 15% from 1 January 2003 – 29 February 2012)
Reduced rate – 8% from 1 January 2006
Reduced rate – 5% from 1 July 2000
Zero rate – 0% from 1 July 1992


Capital Gains Tax
Full capital gains tax exemption on capital gains, except on sale of immovable property situated in Cyprus.
Capital Gains Tax is imposed on gains from disposal of immovable property situated in the Republic including shares of companies not listed on a recognized Stock Exchange which own immovable property situated in the Republic, at the rate of 20%.


Special Levy Tax
As from 2011 an annual levy of €350 payable to the Registrar of companies is introduced for all companies incorporated in Cyprus. For groups of companies the maximum levy is fixed at €20.000.