According to a recent survey conducted by KPMG, Cyprus is one of the most attractive offshore tax havens in Europe.
Together with Ireland and Switzerland, Cyprus enjoys relative transparency in its tax structures, suffers lower levels of taxation change and upset annually compared to other European countries, and has the highest percentage of local citizens happy with the level of tax legislation in place according to the survey.
Of all the nation’s covered by KPMG in the survey and from more than 400 interviews that the financial group conducted with tax professionals in multinational companies in Europe, Cyprus was also found to be the one country with a high percentage of the business community backing the annual decisions of the government relating to taxation changes.
Even other tax favourable countries like Luxembourg and Switzerland lagged well behind Cyprus in terms of the backing received from the local business community, proving that the nation has done very well to maintain its positive tax status and reputation as an internationally focused business orientated country since it joined the EU back in 2004.
For companies seeking a European base for international business transactions, Cyprus could just be the ideal offshore tax haven for incorporation.
For a start the nation is in the EU, therefore companies enjoy the associated status by establishing operations therein. Secondly, the country has managed to maintain a low level of corporation and even personal income tax as well as dividend and royalty tax despite gaining EU entry in 2004…and now, from the 1st of January 2008 Cyprus has adopted the Euro as its official currency which makes European based trading simpler for companies and gives businesses even greater confidence in the jurisdiction.
Interestingly enough, Cyprus is also the one nation in Europe that has had to endure relatively intense scrutiny from the likes of the European Tax Commissioner Laszlo Kovacs and from the OECD. Both have been interested in Cyprus’s approach to international legislation that has been brought in to prevent cross border and international money laundering and tax avoidance for example.
So far no directly targeted recommendations have been made to Cyprus, but the nation does tread a fine line between offering the likes of companies and international retirees an incredibly favourable taxation regime in which to live and work and complying with international legislation designed to prevent serious crime. As long as Cyprus continues to balance both camps so well, it should remain one of the most attractive offshore tax havens in Europe.
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