YIOLA STAVRAKI
L.L.C.
ADVOCATES

Tax based on Residence

Company – Tax Resident in the Republic of Cyprus

In case of a company that is considered a tax resident in the Republic, tax is imposed on the income generated from sources both within and outside the Republic of Cyprus.

Company – Tax Resident Domiciled Outside the Republic of Cyprus

In case of a company that is not considered a tax resident in the Republic, tax is imposed on the income generated from sources only within the Republic of Cyprus.

Test and Benefits of Cypriot Tax Residency

A company is deemed a tax resident when its ‘management and control’ is in Cyprus. There is no set definition of ‘management and control’ and this concept has not been tested before the Cyprus Courts.

It has been perceived, however, that a Company will be deemed a tax resident of Cyprus when the majority of its directors are Cypriot residents and board meetings take place in Cyprus.

Although being a tax resident of Cyprus would lead the Company to pay tax generated from sources both within and outside the Republic, it would nonetheless procure great advantages to a company by enabling it to benefit from the various double tax treaties to which Cyprus is a party, such as in the case of the double tax treaty between Cyprus and Russia.