Taxation of Trusts in Cyprus

How are Cyprus International Trusts taxed?

Cyprus International Trusts provide a significant number of tax advantages and can be used as part of an international tax planning strategy. Below you shall find general information on how trusts may be taxed in Cyprus.  However, please note that in order to estimate the exact tax that may be imposed on a trust, it is necessary to take into account its specifications, its purpose and any other relevant circumstances that may concern it.

Income

  • Income received from sources located outside Cyprus is not taxable in Cyprus if the beneficiary is not a Cyprus tax resident, while income received from local sources is taxable in Cyprus.
  • Income received from either local or overseas sources is taxable in Cyprus, provided the the beneficiary is a Cyprus tax resident.

Dividends

  • Dividends, interest or other income received by a Trust from a Cyprus company are not taxable.

Trustee fees

  • The Cyprus trustee company is subject to 12,5% tax on trustee fees.

Payments to beneficiaries

  • Non-resident beneficiaries are not subject to tax on the payments they receive from a Cyprus tax.

Capital gains

  • Capital Gains that occur after the disposal of assets of a Cyprus International Trust are not subject to capital gains tax in Cyprus.

Estate duty

  • A Cyprus International Trust is not subject to estate duty in Cyprus.

Please note the above information is for general purposes only. For legal and tax advice on your particular case, you can get in touch with our team.