GDP Growth Rate Estimated at +2.9% in Q2 2016

According to the Flash Estimate compiled by the Statistical Service of Cyprus, the GDP growth rate in real terms during the second quarter of 2016 is positive and is estimated at +2.9% over the corresponding quarter of 2015.

Based on seasonally and working day adjusted data, GDP growth rate in real terms is estimated at +2.7%.

The increase of the GDP growth rate is mainly attributed to the sectors: Hotels and Restaurants, Professional, Scientific and Technical Activities, Retail and Wholesale Trade, Manufacturing, Construction and Transport.

Negative growth rates were recorded by the Financial Service Activities.

Income Tax in Cyprus

SUMMARY OF TAX BENEFITS

The favorable provisions of the Cyprus tax legislation as well as the wide network of double taxation treaties make the Cyprus holding company ideal for international tax planning purposes. The main advantages of the Cyprus tax system are summarized below:

·       12.5% uniform corporate tax on trading profits.

·       Dividend income received from abroad is exempt (subject to conditions).

·       No thin capitalization rules.

·       Capital gains from the sale of immovable property situated outside Cyprus is tax exempt.

·       Taxable losses carried forward indefinitely.

·       Capital gains on sale of qualified Securities: 100% exemption.

·       No withholding tax on outward payments (Dividends-Interest-Royalties) to non Cyprus tax residents (companies or individuals).

·       Foreign Permanent Establishment profits exempt (subject to conditions).

·       Tax free corporate re-domiciliation permitted.

·       Possibility for establishing an SE (European Company).

·       Applicability of all EU directives.

·       Advance ruling practice exists.

·       Extensive Double Tax Treaty network.