C yprus tax resident companies are taxed on their worldwide income. A company is tax resident in Cyprus if it is managed and controlled in Cyprus. The corporation tax for companies in Cyprus is 12.5% however foreign taxes paid can be credited against this corporation tax.
o There is no withholding tax on dividends paid to non-residents whether companies or individuals.
o Dividends received by a resident or non-resident company, are generally exempt from corporation tax and Special Contribution for Defence (SCD).
o Dividends received by a Cyprus resident company from a Cyprus resident company are exempt from Special Contribution for Defence. (This is unless dividends are paid out of profits which are more than 4 years old.)
o Dividends received by a Cyprus resident company from a Cyprus non-resident company are generally exempt from Special Contribution for Defence.
o Interest paid to non-resident companies is not subject to any tax.
o Interest paid to a resident company is subject to a Special Contribution for Defence tax at a rate of 30% (withheld at source) unless the interest is earned in connection with ordinary business activities.