In 2004, the Cyprus authorities launched TAXISnet Service, an electronic system for submission of tax returns. Some of the main advantages of using the service are:
Selling assets to your business could be an efficient, quick and comparatively easy way of extracting cash from your company. However, before doing that, you need to learn what types of assets you could sell, at what price, and how to protect yourself from common pitfalls which may give rise to tax liability.
In principal, you could sell any type of asset (tangible or intangible) to your company provided that you have full ownership of what you sell and the Memorandum of Association of your business covers such objective. Yacht boat, motor vehicles, computer hardware, software, furniture, logos, trademarks, antiques, real estate and shares are some examples among the many. After you have concluded the sale, you will receive cash payment and the asset will become property of your business.
In an effort to reduce the fiscal deficit and avoid a third downgrade of the sovereign debt, the Cyprus House of Representatives hastily voted on 26 August 2011, the first package of austerity measures which is expected to shore public finance by €318 million per year. Namely, the following amendments to the legislation were made:
1. The Income Tax Law: impacting personal income
2. The Special Defence Contribution Law: impacting interest and dividend income
3. The Immovable Property Law: related to immovable property tax
4. The Companies Law: fixed annual levy to companies
5. The VAT Law: related to immovable property
6. The Laws relating to the contributions and retirement benefit of government and semi-government employees
Extracting profits from your own business in the form of pension is one of the most tax-effective ways of remunerating yourself. Regrettably, the vast majority of business owners overlook this tax strategies which if implemented properly could significantly lower their tax bill.
In this article, we shall discuss some of the first questions that may come to your mind: How this tax strategy works? Why I should consider including pension contributions to my remuneration? What are the tax benefits, for me and my business? How much I will save in comparison to, say receiving a salary or dividend? How should I go about structuring a pension plan?
Cyprus’ history in providing base for international companies dates back from the 1970’s; however, it was not until the 1990’s that the establishment of offshore businesses significantly starts increasing. Up until 2003 there was a separate treatment for offshore companies (also known as, International Business Companies) as compared to the "local" ones. Today, difference between them does not exist in the eyes of the law or the taxman. In that context, an offshore company denotes a company that is held by foreign shareholders and established outside the country of its main operations or formed to meet a particular purpose (i.e. as SPV/SPE, special purpose vehicle/entity).
Strictly speaking, the cost of establishing and maintaining a company is a factor of its size and activities. Despite that, we shall attempt to at least lay down the base costs of setting up and running a personal or an SME offshore company.