Q: What are the tax implications if I buy a unit in my Limited Company name? A:
All companies tax resident of Cyprus are taxed on all their income accumulated or derived from all sources in Cyprus and abroad. The standard rate of tax for a corporation is 10%.
By law, it is not obligatory for a non-Cypriot who owns property in Cyprus to require a permanent residence permit. For an EU citizen they only have to complete an application form at the immigration office for formality reason, and instantly receive their residence permit. For non-EU citizens they must follow a straightforward procedure. However, permanent residence is easy to obtain. The applicant must submit an application and provide proof that he and his family are self-supported. The following documents must accompany the application:
Three photos and passport
A copy of the sale/rental agreement
Copies of pension/retirement income
Any other document relevant to income
The application for permanent residence may be submitted to the local immigration office in the area of residence.
Under the Aliens and Immigration Law, for those non-Cypriots wishing to take up employment in Cyprus require a work permit. For EU citizens only the approval of the Ministry of Labour is required.
Cyprus offers a distinct benefit in the form of double taxation treaties and lower income tax rates compared with other international financial centres. Agreements with an increasing number of countries removes the double taxation of income earned in these countries. In practice, the tax charged by one country is credited against the tax charged in the taxpayer’s country of residence. Where different tax rates operate, the taxpayer will not have to pay more than the higher of the two rates of the respective countries. Such favourable tax rates for international business entities in Cyprus open the door to significant tax planning opportunities.
To date, double taxation treaties exist between Cyprus and the following countries: Austria, Belarus, Bulgaria, Canada, China, Czech Republic, Denmark, Egypt, France, Germany, Greece, Hungary, India, Ireland, Italy Kuwait, Malta, Norway, Poland, Romania, Russia, Slovakia, Sweden, Syria, United Kingdom, South Africa, United States and Yugoslavia.
Purchasers in Cyprus have the freedom of choice when it comes to appointing a solicitor to handle their affairs. All documents delt with are in English. At the same time, if a purchaser is without a solicitor, we can refer him/her to a number of recognised and experienced professionals.
The Electricity Authority supplies power in Cyprus, the Water Board supplies the water. Gas however is not centrally supplied in Cyprus. The expenses for water and electricity are to be paid to the respective authorities at regular intervals throughout the year. The water is paid every three months and the electricity every two, depending on the consumption of each unit the cost will vary around £50 per month for normal usage to £100.
It is not compulsory, but due to their being no inheritance tax in Cyprus it is advisable to make a will when buying the property otherwise your heirs might be forced to pay tax in your home country if you do not have one.
