One of the basic provisions of the Tax Law in Cyprus is the Law concerning Taxable and Non Taxable Companies.

Non-Taxable Companies
Any Company which is registered in Cyprus and which is not managed or controlled in Cyprus is subject to taxation only on income arising from the business of the Company within Cyprus. Such companies, however, are exempted from the advantages of the Treaties for the Avoidance of Double Taxation.

Taxable Companies
Any Company whose management and control is carried out in Cyprus is taxed in accordance to the relevant tax legislation on a 10% tax rate.

Provided that for Tax Planning purposes the company shall be subject to management and control in Cyprus. Only then can the company enjoy the advantages and incentives in Cyprus as they are referred to below.

Management and Control
The term management and control is not specified in the Cyprus Tax Law. Nevertheless, our experience indicates that it is generally accepted by the tax authorities that such company is managed and controlled in the place where the Directors of the company are residing and in general where the decisions of the Board are taken.