Current Tax Rates

Current Tax Rates in Cyprus

A clear overview of the current tax rates and key comparisons relevant to UK business owners considering Cyprus as a base for their company.

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TAX OVERVIEW

A Clear Side-by-Side Comparison

Relocating a business from the UK to Cyprus can significantly reduce the overall tax burden. Below is a straightforward comparison of key tax areas commonly considered by UK business owners when assessing Cyprus as a base for their company.

KEY COMPARISONS

Cyprus vs UK Tax Comparison

The table below highlights the main areas commonly considered by UK business owners when comparing Cyprus with the UK.

Tax Area

Cyprus

UK

Why It Matters

Corporate Tax

15%

25% main rate, with 19% for small profits up to £50,000

Cyprus offers a lower and simpler flat rate.

Withholding Tax

0% on dividends, interest and royalties paid to non-residents, subject to limited exceptions

Can apply depending on treaty position, especially on interest and royalties

Cyprus provides a more favourable international withholding environment.

Dividend Tax

0% for qualifying shareholders under participation exemption; non-domiciled individuals can pay 0% on dividends for 17 years

£500 dividend allowance, with rates stated as 10.75% basic and 35.75% higher from April 2026

Cyprus can offer dramatically lower dividend taxation.

Effective Tax Reduction (NID)

Notional Interest Deduction can reduce effective tax to as low as 2.5%

No equivalent regime

Cyprus offers a compliant reduction mechanism not available in the UK.

Sale of Shares / Securities

0% tax on profits from disposal of securities

Capital Gains Tax applies; Business Asset Disposal Relief can still result in 18% CGT after 2026

Cyprus provides a full exemption in this area.

Inheritance Tax

No inheritance tax

40% above allowances, with further restrictions noted from 2026

Cyprus can be significantly more favourable for succession and long-term planning.

IP Tax Regime

IP Box regime with 80% exemption, giving an effective rate of around 2.5%

Patent Box at 10%

Cyprus offers a lower potential effective rate on qualifying IP income.

AT A GLANCE

Why Many Businesses Choose Cyprus

While every situation is different, Cyprus is often considered a more tax-efficient and flexible environment compared to the UK across several key areas.

Lower Corporate Tax

A 15% flat corporate tax rate offers a simpler and often more favourable position compared to the UK’s tiered system.

Dividend Efficiency

Dividend income can be significantly more efficient in Cyprus, particularly for qualifying structures and non-domiciled individuals.

International Flexibility

Withholding tax advantages and international structuring opportunities can make Cyprus well suited for cross-border business.

Long-Term Planning

The absence of inheritance tax and favourable treatment of securities can support both business exits and personal planning.

Important Note

The information on this page is intended as a general overview only. Tax treatment depends on your circumstances, the nature of your business and the way the structure is implemented. Professional advice should always be taken before any decision is made.

Business consultation meeting about Cyprus tax planning

BEYOND THE HEADLINE RATE

Tax Efficiency Depends on the Right Structure

Headline rates are important, but the wider structure matters just as much. The right jurisdiction, company setup and long-term planning approach can make a significant difference to the overall result.

At Track Associates CY Ltd, we help clients assess whether Cyprus is the right fit, understand the practical implications and move into a structure that is commercially sound, compliant and built for long-term benefit.

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