| FORMATION OF CYPRUS IBC (OFFSHORE)
SHIPPING COMPANIES
Cyprus Taxation for Shipping Companies
Cyprus Shipping companies are virtually exempt from any type of tax.
Furthermore, International business shipping companies and their
foreign employees are entitled to maintain foreign currency accounts
and may transfer their income abroad after payment of all necessary
taxes.
- they pay no income tax on profits or dividends;
- they pay no estate duty;
- no capital gain is considered to arise from the sale or transfer
of ownership of any ship or shares in a shipping company;
- emoluments of seamen employed on board Cyprus ships are exempt
from tax;
- dividends distributed to shareholders of offshore ship management
companies attract no tax;
- seamen employed by Cyprus international business ship management
companies on board foreign flag ships or in respect of services
on board Cyprus flag ships managed by them pay no tax in respect
of emoluments received by them. To qualify for tax exemption in
respect of foreign flag ships, the emoluments must be paid through
a bank operating in Cyprus.
- foreign employees of international business shipping companies
who derive their income from outside Cyprus are taxed at 10% of
the normal tax rates applicable in Cyprus. If they receive their
emoluments in Cyprus then they are totally exempt from tax.
- foreign employees of international business shipping companies
who work within Cyprus, are taxed at half the rate of tax.
With regards to a ship sailing under the Cyprus flag, it is exempt
from tax in respect of all profits, dividends, capital gains tax
and estate duty arising from shipping activities. |
