Cyprus bank account enjoys many benefits under tax legislation. With the lowest tax regime in Europe, Cyprus has emerged as an international centre of financial benefits and tax exemptions. The laws governing the local companies and International Business Companies do not differentiate in the tax treatment of such companies. A single corporation tax rate is applicable for all companies whether local or offshore.
Cyprus tax residents are not fully taxed for the profits they earn on the disposal of shares. The local businesses enjoy no restriction in the carry-forward of tax losses. They can be carried forward indefinitely to be set-off against future profits. Though sale of immovable property is not exempted, capital gains are fully exempted on the other hand.
Entrepreneurs are benefited from favorable interest rates as interest received by them is typically tax-exempt. An IBC business owner can opt for trading in multiple currencies as there are no exchange control restrictions. An IBC can easily open a Cyprus bank account in any currency that can also enjoy the freedom of foreign exchange commissions and taxes.
Sometimes, offshore banking is perceived as a tax evasion due to which countries make double tax agreements with other nations to provide competitive tax benefits. Under such agreements account-holder information and tax information is exchanged in order to identify tax evaders. Cyprus has 32 Double Tax Treaty agreements which apply to 40 countries and which can be exploited to minimize tax. Cyprus follows strict guidelines, stated under international laws in order to monitor and reduce the abuse of tax systems.
A business enjoys exemption up to the limit of 50% on interest raised out of the ordinary course of business. A business can also enjoy reorganizations, amalgamations, mergers and acquisitions without any tax implications. In case of organized groups, reliefs are available under which losses from a company can be set off against taxable profits of other companies in the same group.
IBCs in Cyprus enjoys many benefits like payment of only 10% taxes on net profits if it is a local Cyprus IBC and has a Cyprus bank account. An IBC can be termed local in case it is managed and controlled within Cyprus itself. Management and control is usually determined by the place of residence of the majority of the directors of the IBC as well as the place of annual general meetings. In case of non-resident IBCs, zero percent tax is levied. Dividend earned by such IBCs is wholly exempted from tax under certain conditions.
By opening a Cyprus bank account, entrepreneurs can be benefited from such exemptions thereby making it an ideal solution for any company to save on its tax liabilities.