Tax Updates May 2013
Amendments in the Income Tax Law and Special Contribution for Defence Law
Income Tax Law
- The corporation tax rate increases from 10% to 12.5% from 1 January 2013
- Tax Losses with effect from 2012 can only be carried forward for the next five tax years
Special Defence Contribution Law
The Special Defence Contribution on interest income applicable to Cyprus tax residents increases from 15 % to 30%. This amendment comes into force from 29/04/2013.
These measures primarily affect domestic tax payers. Non–residents doing business in Cyprus and companies owned by non- residents are largely unaffected by the tax related measures.
The following tax benefits continue to apply:
- Full exemption on Dividends
- Exemption on capital gains on the disposal of shares
- Exemption on capital gains on the disposal of immovable property situated outside Cyprus
- Zero withholding taxes on payments to non-residents
- No change on the rate of Special Defense Contribution on dividends for Cyprus Tax residents.