Tax minimization is the process through which a company can legally reduce the amount of due taxes. Although the country is a low-tax jurisdiction, tax minimization in Cyprus is based on a clear understanding of the taxation principles and the existing exemptions, as well as the situations in which they apply.
Our accounting firm in Cyprus offers complete services to companies and can help individuals understand the principles of taxation and make use of the existing exemptions and deductions to help reduce the annual tax burden.
Tax reduction methods
The list below contains a few examples of strategies that can be used to reduce the tax burden for companies:
- open a Cyprus Holding Company: this type of business structure is fully exempt from the taxation of dividend income from participation;
- make deductions: companies can make reasonable deductions for business entertainment or travel expenses.
- donate: making charitable contributions is a manner of reducing some of the tax burden; one of our accountants in Cyprus can tell you more about accepted donations.
- notional interest deduction: this can apply to companies that have been financed through their own means and can reduce the total level of taxation depending on the company’s level of capitalization;
One of the experts at our accounting firm in Cyprus can give you more details about these available deductions as well as the general rules for taxation compliance. In Cyprus, the Tax Department is the authority in charge of taxation matters.
Assistance for taxation matters from our Cypriot accountants
Our team of accountants in Cyprus can help investors understand the various tax advantages available to companies. Cyprus is one of the countries in Europe with one of the lowest tax rates, of 12.5% and there are no capital gains of income tax on the disposal of company shares or the liquidation of participation. Moreover, there is a complete exemption from the capital gains tax when companies dispose of securities.
Contact our Cypriot accounting firm for complete details about the taxation principles in this low-tax jurisdiction. If you need tax minimization in other countries, such as Bahrain, we can put you in touch with our local partners.