Tax Residency of Cyprus Companies – New Broadened Definition

Following a recent amendment of the Income Tax Law, as from 31/12/2021, a company incorporated under the laws of Cyprus is considered tax resident of Cyprus, provided it is not tax resident in another jurisdiction.

Before the amendment, a Cyprus company was considered tax resident of Cyprus, only if its management and control was exercised in Cyprus; if not, it was not considered Cyprus tax resident.

Under the new definition, the tax residency test is widened to include all companies incorporated in Cyprus whose management and control is exercised outside Cyprus and provided those companies are not tax residents in another country, and as such, their worldwide income will be taxed in Cyprus.