Taxation

    A lot has been said recently about whether Cyprus has maintained its attractiveness as a centre for international business after the tax reform system which came into effect within the framework of the accession of the island to the European Union.

    In reality it has been proven that Cyprus not only has maintained its attractiveness but has also improved its image as a reliable financial centre competing favourably with other similar centres such as the Netherlands, Ireland and Luxemburg.

    The following chart shows the registrations of companies during the years 1995 to 2004 (when there was a record number of registrations) and proves that Cyprus remains high in the list of preferences of foreign investors when they are planning their tax structure.

     

    Naturally, within the framework of their legitimate tax planning, both the companies and investors aim at:

    1. Avoidance or reduction of taxation in the country in which they earn their income
    2. Avoidance or reduction of tax when dispatching income
    3. Reduction or deferment of tax on repatriation of profits
    4. Reduction in the total tax burden of the investment and thus increase of its yield.