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TAX ADVICE IN CYPRUS
What taxes must be paid in Cyprus?
Income tax (CIT), dividends, interest and royalties paid to non-residents of Cyprus are not subject to income tax at the source of payment. The exception is royalties obtained on the rights used in Cyprus. They are subject to taxation at a rate of 10% (in the case of cinematographic films – 5%).
Technical services provided by non-residents in Cyprus are taxed at a rate of 10%. However, if such services are provided through a non-resident permanent establishment in Cyprus or are provided between related companies, they are not subject to taxation.
Income received by non-residents from any professional activity or remuneration of non-resident public artists in Cyprus is taxed at a rate of 10%.
Income received in Cyprus by non-residents (if they do not have a permanent establishment) for the provision of services in the field of exploration, production or operation of the continental shelf, as well as the creation and use of pipelines and other installations on land, seabed and sea surface, is taxed 5%.

- Postal services provided by the national postal authority
- Most banking, financial and insurance services
- A large number of medical and dental services
- Identified cultural, educational and sports activities
- Transfer of real estate, except for the transfer of buildings before their first use, including the transfer of land



Optimization of taxes (taxation) in Cyprus
The professional help of tax lawyers in Cyprus is to find legal and completely legal mechanisms through which businesses can pay much lower taxes.
Preferential treatment applies to:
- Insurance companies
- Recipients of pensions, if they are earned abroad, payments to widows
- Transactions with intellectual property
- For film production
- Professional activity of persons who have not received the status of a resident (artists, athletes)
- Non-residents, if they are engaged in the oil sector
- Maritime business
A tax lawyer (lawyer) in Cyprus will advise you on choosing the optimal tax system for business in Cyprus on
- value added tax in Cyprus VAT (value-added tax),
- corporate income tax (CIT – corporate income tax),
- personal income tax (PIT – personal income tax)
- social contributions from employees (ZUS)
- local tax in Cyprus
- tax on dividends in Cyprus
- excise duty in Cyprus
Tax optimization / exit tax / tax planning (Cyprus)
Among the most common tax optimization mechanisms in Cyprus:
- Creating a group of companies that includes funds in Luxembourg, the Netherlands, Liechtenstein and other jurisdictions, depending on the profile of your business and its features.
- Expanding your business to favorable tax residencies (Hong Kong, Singapore, Slovakia)
- System of refinancing of foreign assets
Representation in the tax authorities in Cyprus from Prykhodko and partners – includes consulting, preparation of all necessary documentation of the relationship with the tax authorities of Cyprus and the EU on tax issues.
Responsibilities of the tax lawyer of Prykhodko Law Firm and partners:
- Tax advice in Cyprus
- Tax assessment in Cyprus
- Preparation of tax documents in Cyprus
- Tax Representation in Cyprus
- Settlement of tax disputes in Cyprus
What is the cost of tax advice in Cyprus? Leave your phone number and our specialists will contact you.
Legal decisions on tax optimization are our profile, which you will be able to see during a consultation with a tax lawyer. No law or regulation requires a person or business to pay more than it should.
We will help you save and save your money so that your business grows quickly and legally.
Calculate the cost of services
1 question
Are you currently in Ukraine?
2 question
Are you currently in Cyprus?
3 question
Do you need a VAT consultation?
4 question
Do you need a CIT consultation?
5 question
Do you need a PIT consultation?
6 question
Do you need a ZUS consultation?
7 question
You need a consultant action on all taxes?
8 question
Do you need a consultation urgently?
The corporate tax rate in Cyprus was raised to 15%. Doesn't this create problems for Ukrainian business?
On the contrary, it is a strategic advantage. The Tax Code of Ukraine provides for exemption from CFC taxation if the effective rate in the foreign jurisdiction is at least 13%. The 15% rate in Cyprus automatically allows legally exempting the profit of a Cyprus company from additional taxation in Ukraine.
How does the updated IP Box regime for IT companies work?
The Cyprus IP Box applies the Modified Nexus Approach, where the benefit depends on actual development costs. If a company develops software locally, 80% of qualifying profit is exempt from taxes. The 15% corporate tax applies only to the remaining 20% of profit, giving an effective tax rate of 3%.
Is it necessary to pay tax on undistributed profit and the annual company levy?
No. The Deemed Dividend Distribution (DDD) rule was completely abolished for profits generated from January 1, 2026. The annual fixed Annual Levy of €350 was also abolished starting in 2024.
Can I get Cyprus tax residency as a business founder?
Yes, the “60-day rule” applies to business founders. It allows you to obtain tax resident status by staying in Cyprus for only 60 days a year if you own or rent housing, have business ties to the country, and are not a tax resident of another state.
What is Notional Interest Deduction (NID) and who is it suitable for?
NID is a powerful incentive for capital-intensive businesses (e.g., industrial or investment holdings). It allows deducting notional interest on the amount of new equity capital introduced from the taxable base. The deduction amount equals the yield of 10-year government bonds of the country of investment plus 5%. This tool can reduce taxable profit by up to 80%.
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