Cyprus not a tax haven: diplomat

It is wrong to call Cyprus a tax haven, according to Demetrios A. Theophylactou, High Commissioner of the Republic of Cyprus in India.

Addressing an interactive session on “Doing Business with Cyprus” organised by the Merchants Chamber of Commerce and Industry, he said Cyprus gives tax incentives and it would be wrong to call it a tax haven, he said. Cyprus has a corporate tax rate of 12.5% and there is a provision for 100% repatriation of profit, he added. Dividends, profits from permanent establishments and profits from sale of securities are exempt from taxes. There is no withholding tax on Dividends, Interest and royalties paid from Cyprus. Start ups are eligible for IT relief up to 50 % of taxable income, Mr Theophylactou said.

Cyprus’ advantages lie in its strategic location, EU membership, robust legal system, low taxation, skilled manpower, value for money services, Ease of Doing Business, incentives and infrastructure according to a MCCI statement.

Cyprus is seeking investments in natural gas, renewable energy, real estate, hospitality and tourism sectors, he said.The country has a large amount of natural gas and gas is a commodity that India wants to import. Cyprus also has strength in renewable energy and shipping management. In fact, it has the third largest merchant fleet in EU and the tenth largest merchant fleet globally. Emerging sectors in Cyprus include investment funds and R&D.

It has developed an Exclusive Economic Zone (EEZ) which has attracted significant interest from oil and gas majors. Bidders include Exxon Mobil, Eni, Total, Cairn Energy, Statoil and Qatar Petroleum.

Vishal Jhajharia, senior vice president, MCCI said that while bilateral trade has increased over the years, there was scope for doing more.