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Recent changes in Cyprus tax laws

Recent changes in Cyprus tax laws

On the 18 April 2013, the Cyprus Parliament voted for a number of new laws which are in accordance with the provisions of the loan agreement agreed for the bailout of Cyprus economy by Troika institutions and the Republic of Cyprus.
  1. The Cyprus Income Tax for Companies increases from 10% to 12, 5%. The increase on the tax rate will be effective from the tax year 2013.
  2. Defence Contribution on interest income derived from deposits will increase from 15% to 30%.
The above measure comes in effect from the time that it will be announced in the official gazette of the Republic of Cyprus.
  1. Increase on the Special Bank Levy from 0.11% to 0.15%. This measure will be effective from the tax year 2013.
Although the above changes have increased the Income Tax rate for Cyprus Companies by 2, 5%, Cyprus Company remains very competitive and retains one of the lowest corporate tax rates within the European Union. Additionally, the Cyprus Company as a vehicle, succeeded in retaining its main competitive advantages which are primarily among others the following:
  • No income tax is imposed on the capital gains arising from the disposal of securities unless immovable property situated in Cyprus is involved
  • No withholding tax on outgoing dividends paid out to non Cyprus tax residents

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