Lysandrou & Thoma L.L.C." — Advocates – Legal Consultants

Tax Law and International Tax Planning

This ‘dusty area of law’ is always a consideration in all forms of planning. The law office Lysandrou & Thoma L.L.C. offers comprehensive legal services in this highly important area in an effort to provide the most efficient and practical solutions to the individual and separate needs of each client.

With our extensive expertise in advising and assisting clients in the implementation of effective tax planning structures designed to minimize tax liabilities, meet the clients financial and business objectives. This service is addressed to private individuals and companies -including offshore companies. Special attention is given on the tax benefits relating to the formation of international trusts. Our law firm has an excellent track record for high quality, sound tax advice and tax planning, as well as extensive experience in negotiating and handling tax disputes.

The Government of Cyprus has recently introduced major tax reforms for Cyprus.

The effects of the reforms are:

• Enhancement of Cyprus as an international business centre.
• Maintenance by Cyprus of its strategic location for investment into and from the Russian, Central European and Eastern European markets.
• Ensuring Cyprus has the lowest tax regime in the EU, and
• Ensuring Cyprus companies enjoy the benefits of investment and trading within the EU.

Main Characteristics and Tax Advantages:

• The distinction between taxation of local companies and IBCs is abolished. The taxable profits of all Cypriot companies are taxed at the rate of 10%, the lowest in Europe that is not offshore. With proper tax structuring much lower effective tax rates can be achieved.
• A fully EU and OECD compliant tax system (Cyprus is a respectable EU country, non – tax heaven jurisdiction).
• No withholding of tax on dividends.
• No capital gains tax.
• Tax exemption for profits from the sale of securities;
• Freely transferable accounts of any currency may be kept either in Cyprus or anywhere abroad without any exchange control restrictions.
• No withholding tax on payment of dividends, interest and royalties to non-resident individuals or to non-resident corporate shareholders.
• No thin capitalization and controlled foreign corporation legislation provides efficient tax planning opportunities.
• No time restriction on carrying forward of tax losses.
• Group relief provisions are available.
• Capital gains realized on immovable property held outside Cyprus will be exempt from capital gains tax.
• Cyprus has concluded an impressive number of treaties for the avoidance of double taxation. Along with the low corporate tax rates and the special provisions for holding companies, the Cyprus companies provide an excellent vehicle for effective international tax planning.
• The identity of the owners can be kept secret, and nominee shareholders may be used.
• The professional and management services offered in Cyprus are of a very high standard.
• Strong legal system based on English common law;
• Its strategic geographic location.
• Able to register for VAT purposes.
• No obligation for the Holding Company (or right) for VAT registration & compliance.
• Profits earned from a permanent establishment abroad are fully exempt from Cypriot tax, subject to certain conditions.
• No withholding tax on dividends received from EU subsidiaries.

We regularly advise clients on the selection of the right jurisdiction for a transaction, or the best strategy to reduce overall taxation and protect corporate or individual assets. Our clients range from individuals to large corporate companies, both locally and abroad.