Taxation in Cyprus. Update

He that is warned afore is noght bygiled

We have already written about the expected changes in the tax field of Cyprus. This article is the update on the expected changes as of October 26, 2022. You may use the updated information to plan your next steps.

Changes in the tax field of Cyprus that have ALREADY took effect (after June 21, 2022 when our previous article was written)


Employees relocating to Cyprus* with the salary of less than €55,000 a year can get an income tax reduction in the amount of 20% of the income (or €8,550 a year, whichever is the lesser) for 7 years.


International companies / their employees who will choose Cyprus for relocation.



Employees relocating to Cyprus* with the salary of €55,000 a year will get an income tax reduction in the amount of 50% of the income for 17 years.

Certain reductions will be available for employees* who relocated after 2015 and who had the annual income of more than €55,000 but less than €100,000 (i.e. who did not meet the reduction criteria before).


International companies / their employees who will choose Cyprus for relocation.



Requirements for transfer pricing (TP) documentation to be maintained depending on the scope of activities with related parties have been defined**:

  •  Up to €750,000 – it is NOT required to prepare the Local File
  •  More than €750,000 – the Local File should be prepared
  •  More than €750,000,000 – the Master File should be prepared

Companies should prepare and submit Summary Information Table (SIT) with the information regarding transactions with related parties.

TP documentation should be prepared within 15 months.

Penalties for violations – from €500 to €20,000.


Cypriot companies handling transactions with related parties.


* – in case certain past employment requirements are met.

** – relatedness criterion: ownership / control / income right interest is 25%. Also, parties will be considered related if they have a common related party that meets this criterion.

Changes in the law field of Cyprus that will take effect on December 31, 2022


A Cypriot company will ALWAYS be a tax resident of Cyprus EXCEPT FOR cases when it is a tax resident of another country.

Management and control test will still be applied for foreign companies.


Cypriot companies that were not registered as taxpayers in any country (so called stateless companies).



Cyprus will withhold WHT on interest, dividends and royalty in case their recipient is a company that is a taxpayer in the jurisdiction blacklisted by the European Union[1] or a company that is NOT a taxpayer in any country and is registered in the above mentioned jurisdiction.

Withholding tax rates:

  • 17% for dividends (except for dividends payable by the listed Cypriot companies)
  • 30% for interest (except for interest on exchange-traded securities)
  • 10% for royalty


Cypriot companies that pay dividends, interest or foreign counterparties from the EU blacklisted jurisdictions.

Remote changes in the tax field of Cyprus


It is expected that the withholding tax on dividends, interest and royalty paid to low-tax jurisdictions will be introduced by December 31, 2024[2]


Cypriot companies having counterparties or shareholders from low-tax jurisdictions.

It is important to understand that the data in this table is preliminary and indicative. The actual situation may differ significantly.


[1] At the time of this article, the EU blacklisted jurisdictions include the following countries: American Samoa, Anguilla, Bahamas, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, Turks and Caicos Islands, US Virgin Islands, Vanuatu. The updated list may be found here:

[2] In accordance with the Cyprus’ National Recovery and Resilience Plan.

Oleksandr Pustovoi

Corporate Administrator

Corporate Services

Korpus Prava (Cyprus)

Other Articles on Topics
See Also Articles from the Issue
Legal design in working with agreements

The first and most noticeable part of Legal design is the form, i.e. the way the document looks. Earlier on, more attention was paid to decorating a document: complex font, beautiful thick paper, and other ‘high status’ elements. But now, in the age of digitalization, the focus has shifted towards simplifying the presentation of information, adding tables, graphs, charts, comics, timelines to the text. Working with font and color [...]

January 04, 2023

Business relocation to Cyprus. Overview of taxes and payroll contributions

By comparison, in Russia the individual income tax rate remained at 13% with the recent introduction of a progressive scale that increases it to 15%. And if your employees work remotely for a Russian company and are tax residents of other countries, the rate is 30%.

January 04, 2023

Automatic exchange of financial information in 2022

The automatic exchange of financial information is not much of a complicated, if not a simple, process of data exchange between the competent authorities of different countries. The exchange has obvious benefits for both countries themselves and taxpayers, and its termination may have long-term negative consequences.

November 07, 2022