Direct taxes - Corporate Income Tax

    Generic part

    Corporate income tax
    Εταιρικός Φόρος
    CY - Cyprus
    EUR
    Date
    Year
    1991/01/01
    2018/01/01
    2019/05/14 14:36:09

    Contact information

    Administration

    Cyprus Tax Department

    Service

    Cyprus Tax Department

    Website

    http://www.mof.gov.cy/mof/tax/taxdep.nsf/index/index?opendocument

    E-mail

    Telephone

    +35722601915

    Who sets

    The tax rate is set by

    • Central authority
    • Regional authority
    • Local authority
    • Social security

    The tax base is set by

    • Central authority
    • Regional authority
    • Local authority
    • Social security

    The reliefs are set by

    • Central authority
    • Regional authority
    • Local authority
    • Social security

    Beneficiary

    • Central authority
    • Regional authority
    • Local authority
    • Social security
    • Others

    Geographical Scope

    CY - Cyprus
    No Yes

    Taxpayers

    Which entities are liable for CIT?

    • Legal persons
    • Organizational units having no legal personality
    • Tax capital groups
    • Associations
    • Foundations
    • Companies having their seat or management office in other countries, provided that in their country they are treated as legal persons and are subject to tax on income
    • Public corporations
    • Others

    Which entities are exempt from CIT?

    Foundations-Charities, Associations

    Domestic-source income of non-resident entities is

    Taxed
    Not Taxed

    Tax object and basis of assessment

    As general rule, taxable income under corporate income tax includes also

    • Interest
    • Royalties
    • Dividends
    • Capital gains
    • Income from immovable property
    • Income from movable property not listed above
    • Income from agriculture

    Income considered

    Domestic income
    Worldwide income (subject to double-tax relief)

    Deductions, allowances, credits, exemptions

    Valuation of inventory

    • First-in first-out (FIFO)
    • Last-in first-out (LIFO)
    • Average cost
    • Specific identification

    Depreciation rules

    Buildings

    Depreciable
    Not-depreciable
    • Straight-line method
    • Declining balance
    • Production method
    • Combination of above
    • Other
    33 Years
    3 %

    Other fixed immovable assets (e.g. machinery)

    Depreciable
    Not-depreciable
    • Straight-line method
    • Declining balance
    • Production method
    • Combination of above
    • Other
    5 Years
    20 %

    Movable (tangible) assets (e.g. cars, furniture, work equipment)

    Depreciable
    Not-depreciable
    • Straight-line method
    • Declining balance
    • Production method
    • Combination of above
    • Other
    5 Years
    20 %

    Intangible assets (e.g. patents)

    Depreciable
    Not-depreciable
    • Straight-line method
    • Declining balance
    • Production method
    • Combination of above
    • Other
    6 Years
    16.67 %

    Land (if any)

    Depreciable
    Not-depreciable
    • Straight-line method
    • Declining balance
    • Production method
    • Combination of above
    • Other

    Are there limits to interest deductions (other than thin capital rules)?

    No Yes
    No interest deduction up to 7 years for the purchase of private vehicles and assets not used in business, unless purchase of shares as from 2012 of directly or indirectly wholly owned subsidiary subject to certain conditions.

    Is there an Allowance for Corporate Equity?

    No Yes

    Exemptions from taxable income

    No Yes
    • Income from participations (dividends)
    • Patents income (e.g. patent boxes)
    • Other, please describe

    Expenses that are generally not deductible:

    expenses of private (saloon) cars, expenses not wholly and exclusively related to the production of income and expenses with no legal receipts and/or invoices

    Losses

    Loss carry-forward exists?

    No Yes
    • Indefinite
    5 Years

    Loss carry-backward exists?

    No Yes
    • Indefinite

    Tax credits available?

    No Yes
    • For research and development investments
    • For training
    • Other, please describe:

    Rate(s) Structure

    12.5 %

    Special tax rate for SMEs

    No Yes

    Measures against profit shifting

    Do Thin Capitalization (TC) rules exist?

    No Yes
    • Explicit TC law
    • Part of CIT law
    • Arm’s length
    • Ratio
    :
    Internal
    Internal and external

    TC depends on shareholding?

    No Yes
    Direct
    Indirect

    Automatic remedy

    No Yes
    • Non-deductibility of interest
    • Reclassification as dividend
    All companies
    Foreign companies
    Non-EU companies

    Transfer pricing rules exists?

    No Yes
    No Yes
    • Fee
    • Tax base increase

    Special features

    Is group taxation available?

    No Yes

    Is there a specific anti-avoidance provision in the legislation?

    No Yes

    International aspects

     
    Treaty countries
    Non-treaty countries
    Repatriated profits are taxed according to the following system
    • Exemption system
    • Tax credit
    • Deduction
    • Exemption system
    • Tax credit
    • Deduction
    Interest received is taxed
    No Yes
    No Yes
    Tax rate on interest received
    0 %
    0 %
    Outgoing dividends withholding tax
    0 %
    0 %
    Outgoing royalty payments withholding tax
    10 %
    10 %
    Outgoing interest payments withholding tax
    0 %
    0 %
    Foreign losses (of either subsidiaries or permanent establishments) can be set-off
    No Yes
    No Yes
    If yes :
    Minimum direct or indirect shareholding to qualify loss-offset (if applicable)
    75 %
    75 %
    Loss carry-forward exists?
    No Yes
    No Yes
    If yes :
    Time limit
    • Indefinite
    5 Years
    • Indefinite
    5 Years
    Size limit
    Loss carry-backward exists?
    No Yes
    No Yes
    If yes :
    Time limit
    • Indefinite
    • Indefinite
    Size limit
    Controlled foreign company (CFC-) rules exist?
    No Yes
    No Yes
    If yes :
    Time limit:
    • Indefinite
    • Indefinite
    Size limit
    Threshold for capital or voting power held directly or indirectly by resident in non-resident company:
    0 %
    0 %
    CFC-rules apply if foreign tax rate is lower than:
    12.5 %
    12.5 %
    CFC-rules apply for passive income only?
    No Yes
    No Yes

    Tax due date

    When has the tax return to be filed

    • 3 months after closing of the tax period
    • 6 months after closing of the tax period
    • Later than 6 months after closing of the tax period
    • Date set by the Authority
    • Other
    • Extensions of the deadline are possible

    Advance tax payments due?

    No Yes
    • Monthly
    • Quarterly
    • Bi-annual
    • Annual
    • Other

    Tax collector

    General comments

    Economic function

    • Consumption
    • Labour Employed (paid by employers and employees)
    • Labour Non-employed
    • Capital income: corporations
    • Capital income: income of households
    • Capital income: income of self-employed
    • Capital stocks

    Environmental taxes

    • Energy
    • Transport
    • Pollution/resources

    Tax revenue

    d51b-c04 + d51b-c05
    Year Annual tax revenue (in millions) % of GDP % of total tax revenue -
    2017
    807.6
    4.1265 %
    12.1462 %
    2016
    710
    3.8399 %
    11.656 %
    2015
    701.3
    3.9519 %
    11.8828 %
    2014
    672.3
    3.8177 %
    11.4331 %
    2013
    694.9
    3.8307 %
    12.1287 %
    2012
    694.9
    3.5655 %
    11.2686 %
    2011
    770.3
    3.904 %
    12.2552 %
    2010
    676
    3.5027 %
    10.9703 %
    2009
    728.9
    3.9034 %
    12.2772 %
    2008
    821.8
    4.3239 %
    12.4411 %
    2007
    750.7
    4.2675 %
    11.8299 %
    2006
    540.8
    3.3252 %
    10.3653 %
    2005
    430.2
    2.8605 %
    9.1165 %
    2004
    353
    2.5326 %
    8.5991 %
    2003
    309.8
    2.4069 %
    8.3554 %
    2002
    387.7
    3.2086 %
    11.4596 %
    2001
    369.9
    3.188 %
    11.3721 %
    2000
    317.1
    2.9349 %
    10.7517 %

    Footnotes