The Corporation Tax rate for companies is 12.5%.
The following income is exempt from corporation tax:
- Dividend income;
- Interest Income not arising from the ordinary activities of the company or is closely connected to the ordinary activities of the company;
- Profit from the disposal of securities.
Any expenses which are incurred wholly and exclusively for the production of taxable income of the business are considered as tax deductible expenses.
Tax losses are carried forward 5 years, to be set off with future taxable profits.
Tax credit for tax paid abroad
The tax paid abroad on income which is taxable under corporation tax in Cyprus is given as a tax credit against the payable corporation tax.