Under the new Income Tax Law, all distinctions between local and international business companies have been removed. The taxation of companies is now based on residence. All companies that are tax resident in Cyprus are taxed on their accrued or derived from all chargeable sources in Cyprus and abroad. Non-Cyprus tax resident companies are taxed in Cyprus only on income derived from a permanent establishment or immovable property in Cyprus.
A company is resident of Cyprus if it is managed and controlled in Cyprus. Registration or incorporation in Cyprus is not sufficient to render a company liable to tax in Cyprus.
A uniform 12,5% corporate tax rate is applicable to the worldwide income of all Cypriot tax-resident companies.