International Tax Planning & Optimisation
Despite the increasing regulatory and legislative requirements, coupled with OECD BEPS Initiatives, the Multilateral Instrument (“MLI”) and the EU’s response to the MLI through the Anti-Tax Avoidance Directive (“ATAD”) establishing a business in Cyprus remains a tax attractive way to conduct business in the EU and beyond. Indeed, precise tax planning in an EU and OECD compliant jurisdiction that retains tax efficiency and certainty, like Cyprus, is now, more than ever, a necessity.
The Firm assists its clients to assess the tax implications of business decisions by developing and delivering accurate bespoke solutions that maximise tax savings and minimise tax exposure in complete compliance with Cyprus statutory obligations, thereby increasing competitiveness by reducing tax leaks. Wherever necessary we can compliment Cyprus by forming and administering foreign vehicles through our network of affiliates in: Luxembourg, Switzerland, the Netherlands, the United Kingdom, Ireland, Malta, Hong Kong, the United Arab Emirates, Singapore, Cayman and the British Virgin Islands.
Cyprus Companies in Tax Planning
Cyprus Holding Company
A Cyprus company can act as an intermediary between EU and non-EU jurisdictions, as well as in combination with emerging markets such as Russia and India. A Cypriot company receives dividends from subsidiaries suffering little or no Withholding Tax (“WHT”) at source in accordance with the provisions of the EU Parent-Subsidiary Directive or under Cyprus’ extensive network of double tax treaties. Disposals of shares in the subsidiaries can be made with no Cypriot tax consequences. Dividends can be paid by the company without deduction of withholding tax.
Cyprus Financing Company
Undertaking a group financing function, a Cypriot company can receive interest income triggering no or little withholding tax at source in accordance with the provisions of the EC Interest & Royalties Directive or under Cyprus’ network of double tax treaties and pay interest without deduction of withholding tax. The net profits are taxable at 12.5%.
Cyprus Investment Trading Company
Profits from the disposal of securities (shares, bonds, debentures and options) are exempt from tax irrespective of whether this profit forms part of a company’s trading activity or is capital in nature.
Cyprus Intellectual Property Holding Company
Royalty income can be derived suffering no or little withholding tax at source in accordance with the provisions of the EC Interest & Royalties Directive or under Cyprus’ extensive network of double tax treaties. For more information see Legal Services: Intellectual Property & IP Box.
Cyprus Ship Owning and/or Managing and/or Crew Employing Company
Specific tax exemptions apply to companies owning Cyprus flag ships or managing and employing crews working in international waters. For more information see Legal Services: Vessel Registration & Holding Management.
Cyprus Company for Oil & Gas Exploration
Combined with the permanent establishment exemption, often the exploration activity can be undertaken in an income tax free manner.
The Firm offers bespoke advice and solutions on optimising competitiveness upon consultation and request.