Withholding Taxes

Income from Intellectual Property and Royalties

Non-residents earning income from intellectual property rights, exploitation rights, and similar incomes sourced within Cyprus are subject to a 10% withholding tax, though tax treaties may reduce this rate. Royalties paid to entities in EU Member States may be exempt from withholding tax, under specific conditions. Additionally, rights granted for use outside of Cyprus are not subject to withholding tax.

Film Royalties

Non-resident individuals earning from film royalties within Cyprus are taxed at a withholding rate of 5%, subject to adjustments per applicable tax treaties. Similar to other royalty incomes, exemptions may apply when the recipient is an entity in an EU Member State, meeting certain criteria.

Income from Oil & Gas Related Activities

Income derived by non-residents from activities related to the extraction, exploration, or exploitation of natural resources in Cyprus is taxed at a withholding rate of 5%. This encompasses services associated with the continental shelf, subsoil, and related installations, with possible reductions through tax treaties.

Income from Technical Assistance

Technical assistance provided within Cyprus by non-residents incurs a 10% withholding tax, unless the services are rendered through a permanent establishment in Cyprus, in which case the income is exempt from withholding tax.

Payment and Penalties for Withholding Tax

Withheld taxes on payments to non-residents must be remitted to the Tax Department by the end of the month following the payment. Delays in payment may attract interest and penalties, emphasizing the importance of timely tax compliance.

These diverse rules cater to different categories of income, providing a structured tax regime that aligns with international standards and addresses the specificities of various types of incomes and activities within Cyprus.

Disclaimer

Please note that the information provided here is for general guidance only and does not constitute professional tax advice. Tax laws and interpretations are subject to change, and individual circumstances can significantly affect tax obligations and benefits.

Contact Us

For personalized tax advice tailored to your specific situation, we strongly recommend consulting with a qualified tax professional. Our team is equipped with the expertise to navigate the intricacies of Cyprus tax law and provide you with customized solutions. Contact us to ensure that you are making the most informed decisions for your tax-related matters.

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