- No tax on gains from
- Sale of securities (founder shares, public shares, bonds, debentures, etc)
- Real estate located outside Cyprus
- Surpluses from company liquidation
- Dividend income from an overseas subsidiary is exempt from Cyprus tax, provided that at least 1% is held in its share capital and
- Its income is either subject to 5% (or higher) tax, OR
- More than 50% of its activities lead to trading income (as opposed to “passive” income such as income from interest)
- EU operating subsidiary: Dividends should be received in Cyprus with no withholding tax under the provisions of the EU Parent-Subsidiary Directive
- Non-EU operating subsidiary: the level of the withholding tax on dividends received in Cyprus is subject to the double tax treaty between Cyprus and the non-EU member state of the operating subsidiary (e.g. for Russia this is 5%, Ukraine 0%)
- Cyprus does not impose any withholding tax on dividends paid to non-resident shareholders
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