Cyprus to raise corporate income tax to 15% for all companies

[dandiskahn]

How come nobody is talking about this? It's huge!

https://knews.kathimerini.com.cy/en...rhaul-aims-to-boost-economy-but-sparks-debate

Initially it should have been only for companies with a 750M+ turnover but it's been extended to everyone.

In my opinion it makes Cyprus much less attractive compared say to Malta and Ireland in the EU.

 

[marioIT]

2.5% more tax in the grand scheme of things is not a lot, you could add some expenses to offset it... if you really live there.
but yeah, I never fully trusted cypriots. the place is nice, food is ok, taxes are ok, but there are too many communists parties and supporters around to sleep safely long term.
If you can, get out of EU.

 

[cyprus123]

It's not through the parliament yet, we will see if it's really happening.

Good news is that non domiciled status might be extendable, so there could be no limitation to 17 years anymore.

We shall see.

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https://virtualzonegeorgia.com/

 

[HardRJones]

I haven't trusted Cypriot banking since 2013. This is just another reason to avoid the place.

 

[JimBeam]

It's good and bad.

Bad as some will pay a little bit more tax.

Good as less countries will point to Cyprus saying it's low tax jurisdiction. So corporate tax will be in line with OCED recommendations while non-doms will be able to keep low personal tax (capital gains, dividends etc) and that's the real deal.

 

[GPT]

HardRJones said:
I haven't trusted Cypriot banking since 2013. This is just another reason to avoid the place.
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Agree on the banking. The legal frameworks of the jurisdiction are however nice but... with all the changes in the last 15 years im not sure if Cyprus is headed in the right direction long term. This 15% thing is for instance not necessary and yet its proposed. How stable is the country in that sense?

My default rule stays valid; evaluate your structure every 2 years and be ready to change it.

 

[dandiskahn]

JimBeam said:
It's good and bad.

Bad as some will pay a little bit more tax.

Good as less countries will point to Cyprus saying it's low tax jurisdiction. So corporate tax will be in line with OCED recommendations while non-doms will be able to keep low personal tax (capital gains, dividends etc) and that's the real deal.
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But after all that's happened why would Cyprus still be considered as a tax haven? Malta has 5% real corporate tax. Ireland has 12.5%, Bulgaria has 10% and so on...

Why change it?

 

[GPT]

dandiskahn said:
But after all that's happened why would Cyprus still be considered as a tax haven? Malta has 5% real corporate tax. Ireland has 12.5%, Bulgaria has 10% and so on...

Why change it?
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Malta has 5% if you manage to qualify which largely depends on your line of work.

Ireland will soon fall in line. Bulgaria will take a little longer and lets not forget, because of the language Bulgaria is less attractive as a haven to establish oneself.

 

[dandiskahn]

cyprus123 said:
It's not through the parliament yet, we will see if it's really happening.

Good news is that non domiciled status might be extendable, so there could be no limitation to 17 years anymore.

We shall see.
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PWC says at least the corporate tax increase is a done deal.
https://www.pwc.com.cy/en/publications/direct-tax-updates-2025/dtu-n6-2025.pdf

 

[Hydrox]

Just as im moving there in 25 days, they increase the tax.. But i will be honest 2.5% wont hurt much, even if you were to deduct a bit "too much" from your business expenses to compensate for that, would you even ever get an audit there?

 

[JimBeam]

dandiskahn said:
But after all that's happened why would Cyprus still be considered as a tax haven? Malta has 5% real corporate tax. Ireland has 12.5%, Bulgaria has 10% and so on...

Why change it?
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Cyprus is just low tax jurisdiction.

Achieving 5% on Malta is quite difficult. You need to setup multiple companies so it's generally attractive only to larger businesses.

Cyprus is straight forward and better even for smaller companies - with profits of couple hundreds thousand euros - not millions. And if it can go under IP Box - the tax can go down to 2.5%.

Ireland I know nothing about.

Bulgaria is a valid choice especially if you take other things into consideration like lower setup and accounting costs (that are probably a fraction of these in Cyprus or Malta). Language is a bit of an issue. There are other good things like low dividend tax of just 5% and low capital gains tax of just 10% plus no capital gains on EU stocks/ETFs.

You could also go with Montenegro with 9% if profit below 100k EUR. Above 100k up to 1.5M range it's 12% and over 1.5M it's 15%.

Change is due to OECD pressing all countries to have min. 15% CIT tax to avoid businesses moving to other places to save on taxes. Basically they want to eliminate tax havens and low tax jurisdictions - so it doesn't matter where you go - you won't pay less than 15%.

Hydrox said:
Just as im moving there in 25 days, they increase the tax.. But i will be honest 2.5% wont hurt much, even if you were to deduct a bit "too much" from your business expenses to compensate for that, would you even ever get an audit there?
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Business expenses can be a lot of things but not crazy things as in other countries. So this part is pretty limited.
For eg. travel expenses are not that easily justified etc.

 

[Hydrox]

JimBeam said:
Cyprus is just low tax jurisdiction.

Achieving 5% on Malta is quite difficult. You need to setup multiple companies so it's generally attractive only to larger businesses.

Cyprus is straight forward and better even for smaller companies - with profits of couple hundreds thousand euros - not millions. And if it can go under IP Box - the tax can go down to 2.5%.

Ireland I know nothing about.

Bulgaria is a valid choice especially if you take other things into consideration like lower setup and accounting costs (that are probably a fraction of these in Cyprus or Malta). Language is a bit of an issue. There are other good things like low dividend tax of just 5% and low capital gains tax of just 10% plus no capital gains on EU stocks/ETFs.

You could also go with Montenegro with 9% if profit below 100k EUR. Above 100k up to 1.5M range it's 12% and over 1.5M it's 15%.

Change is due to OECD pressing all countries to have min. 15% CIT tax to avoid businesses moving to other places to save on taxes. Basically they want to eliminate tax havens and low tax jurisdictions - so it doesn't matter where you go - you won't pay less than 15%.


Business expenses can be a lot of things but not crazy things as in other countries. So this part is pretty limited.
For eg. travel expenses are not that easily justified etc.
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But how often do you get an audit in cyprus for your tax filings? From what i heard its very very unlikely. Only VAT authorities might come once in a while

 

[JimBeam]

Hydrox said:
But how often do you get an audit in cyprus for your tax filings? From what i heard its very very unlikely. Only VAT authorities might come once in a while
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You are required to have proper accounting/bookkeeping and annual audits in Cyprus.
One can probably skip that but it might come at a cost later down the road.

 

[GPT]

JimBeam said:
Change is due to OECD pressing all countries to have min. 15% CIT tax to avoid businesses moving to other places to save on taxes. Basically they want to eliminate tax havens and low tax jurisdictions - so it doesn't matter where you go - you won't pay less than 15%.
Click to expand...

Curious to see if it will hold up now that teh USA has voiced concerns.

 

[GPT]

JimBeam said:
You are required to have proper accounting/bookkeeping and annual audits in Cyprus.
One can probably skip that but it might come at a cost later down the road.
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No you cannot skip auditing. Ive tried it countless times in various ways. Every single time I had to get accounts audited. The best way is to find an auditor which you can work with for real. Older individuals I found the best and most convenient in that sense.

 

[OffshoreDude]

Just a few years ago Cyprus lowered the audit requirements for SMEs. If your company has a turnover (or was it profits?) of less denn 200K, you are not required to have a full audit done, it can be just a review of your books, which reduces costs significantly with lower fees for that. No wonder, you rarely see Cyprus accounting firms promoting this reduced service, it seems that they want to keep on selling their more expensive full audits, even to SME, which don't need it anymore.

 

[Dandyline]

OffshoreDude said:
Just a few years ago Cyprus lowered the audit requirements for SMEs. If your company has a turnover (or was it profits?) of less denn 200K, you are not required to have a full audit done, it can be just a review of your books, which reduces costs significantly with lower fees for that. No wonder, you rarely see Cyprus accounting firms promoting this reduced service, it seems that they want to keep on selling their more expensive full audits, even to SME, which don't need it anymore.
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Yes, it's the lowest threshold in EU. They should get rid of audits.

 

[OffshoreDude]

Dandyline said:
Yes, it's the lowest threshold in EU. They should get rid of audits.
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Or at least increase the threshold significantly, 500K would be ok in my opinion.

 

[OffshoreDude]

As I just noticed in a recent article, published in the "Cyprus Mail", the Finance Minister of Cyprus, Mr. Makis Keravnos, also isn't capable of doing simple math, as the mentioned piece writes: "Keravnos described the proposed increase from 12.5 per cent to 15 per cent as “marginal and small”.

No, Mr. Keravnos, as I pointed out in my initial post of this thread, the increase from 12,5 to 15% isn't "marginal and small", actually it is a big fat increase of 20%!

The article also mentions the motives behind the increase: "While modest, this adjustment, he argued, enhances Cyprus' international credibility by dispelling the perception of a tax haven, while still keeping the island competitive for global businesses."

For those of you interested in reading the article, here's the link: https://cyprus-mail.com/2025/04/03/...t-raising-cyprus-tax-free-income-above-e20500

 

[GPT]

And it's not that long ago when the tax rate was 10%. In a little over a decade a 50% increase is substantial and shows a not so trustworthy government.

Is Cyprus still worth it? IMO yes, they are still a tool in the toolbox.

Same for personal tax threshold of 20500. With some proper planning you can easily manage to work with the 20500. The combination of corporate and personal tax makes Cyprus still very interesting. But at the same time, keep eyes open and structure in a way that you can leave. The current situation will at least hold up for 8-12 years.