Yachts
Cyprus is a key maritime centre attracting foreign ship owners through the highly favourable tax provisions available for shipping companies on the island. It is recognised as one of the most accessible registries in the EU.
The Cyprus shipping registry has not only grown in size in the last two decades but has also made a considerable effort to increase the quality of its fleet and related services. As a result, the Cyprus flag is now classified on the white list of the Paris and Tokyo MOUs*.
Key advantages relating to the shipping sector in Cyprus include:
- Competitive yacht registration fees
- Low annual fees for yacht owners
- New VAT procedures have been introduced, which comply with the European and Cypriot Law and which are approved by the European Commission. The income of officers and crew on Cypriot registered vessels is not subject to income tax.
- Cyprus offers a competitive rate of corporate income tax at 12.5%.
- There is no estate duty on the inheritance of shares in a Cyprus shipping company and no stamp duty is payable on ship mortgage deeds.
- A tonnage tax system was enacted in May 2010. The tax system is in full compliance with EU requirements. The tonnage tax (TT) is calculated on the net tonnage of the ship according to a broad range of band rates proscribed in legislation. The Cypriot approved tonnage tax system provides for TT on the net tonnage of the vessel rather than corporation tax on the actual profit. This allows for mixed activities within a group, shipping activities are subject to TT and other activities are subject to 12.5% corporation tax.
- Cyprus also offers a series of tax advantages which are applicable to ship and ship management companies: exemption from tax of dividend income (subject to limited conditions), exemption from tax on profits from foreign permanent establishments, and exemption from withholding tax on the repatriation of income (dividends, interest and nearly all royalties).
*White List Paris and Tokyo MOUs: Flags securing the highest rating in relation to the Memorandum of Understandings on Port State Control.
Ships
Cyprus is a major ship management centre attracting foreign ship owners through the highly favourable tax provisions available for shipping companies on the island. It is recognised as one of the most accessible registries in the EU.
The Cyprus shipping registry has not only grown in size in the last two decades but has also made a considerable effort to increase the quality of its fleet and related services. As a result, the Cyprus flag is now classified on the white list of the Paris and Tokyo MOUs*.
Key advantages relating to the shipping sector in Cyprus include:
- Cyprus exempts international transport services from value added tax when these services are supplied outside of the EU.
- The income of officers and crew on Cypriot registered vessels is not subject to income tax.
- Cyprus offers a competitive rate of corporate income tax at 12.5%.
- There is no estate duty on the inheritance of shares in a Cyprus shipping company and no stamp duty is payable on ship mortgage deeds.
- A tonnage tax system was enacted in May 2010. The tax system is in full compliance with EU requirements. The tonnage tax (TT) is calculated on the net tonnage of the ship according to a broad range of band rates proscribed in legislation. The Cypriot approved tonnage tax system provides for TT on the net tonnage of the vessel rather than corporation tax on the actual profit. This allows for mixed activities within a group, shipping activities are subject to TT and other activities are subject to 12.5% corporation tax.
- Cyprus also offers a series of tax advantages which are applicable to ship and ship management companies: exemption from tax of dividend income (subject to limited conditions), exemption from tax on profits from foreign permanent establishments, and exemption from withholding tax on the repatriation of income (dividends, interest and nearly all royalties).
AIRCRAFT
Cyprus is one of the most attractive jurisdictions in the European Union for the registration of a private aircraft.
The Cyprus Aircraft Leasing Scheme requires a lease agreement of a private aircraft between the Lessor (the owner of the private aircraft) and the Lessee (the person who leases the private aircraft) for the use of the private aircraft by the Lessee for a consideration.
The Lessor should be registered with the Cyprus VAT authorities and the Lessee should have its permanent or ordinary residence in Cyprus and not engaged in any business activity.
Additionally, this lease agreement may grant the option to the lessee to purchase the aircraft at a pre-agreed price at the end of the leasing term.
Features and Benefits
- The private aircraft can be registered to any Aircraft Register in the world, not necessarily the Cyprus Aircraft Register.
- The total profit from the lease of the aircraft (minimum 5% of the original value of the aircraft) is subject to the current corporate income tax rate of 12.5%.
- The Lessee must pay 40% of the original value of the aircraft to the Lessor on the lease commencement date.
- The lease period must be not less than 3 months and not more than 5 years.
- If at the end of the lease period, the lessee decides to acquire the aircraft, the VAT Authorities will issue a certificate confirming the total VAT liability payment.
- Once the owner of the aircraft has paid the VAT relating to the initial payment (40% of the value of the aircraft) he can import the aircraft into Cyprus and the Cyprus Customs Office will issue a T2L certificate.
Key People
Directors:
R. Homem GTP (SA)
C. Pittas BSc FCA
A.J. Magell BSc ACA
Company Number: HE 310256
Licence granted by the Cyprus Securities and Exchange Commission (CySEC)
Cyprus Office Information
Dixcart Management (Cyprus) Limited provides expertise to international clients, both companies and individuals, seeking to benefit from the organisation of their activities in Cyprus.
Dixcart Management (Cyprus) Limited
165 Archiepiskopou Leontiou A’ Street
3022 Limassol
Cyprus
t +357 25 030 637
e advice.cyprus@dixcart.com
The Postal Address is:
PO Box 58216
3732 Limassol
Cyprus
Cyprus Office Services
A comprehensive range of services are available from our office in Cyprus:
Registration of a yacht, ship or Aircraft in Cyprus
Our professionals in the Dixcart office in Cyprus are expert in registering a vessel efficiently and diligently..
Establishment of an appropriate corporate structure
Establishing the right corporate structure is important. Dixcart Cyprus can advise on the most appropriate and tax efficient structure to protect assets.
Importation
Dixcart can provide all of the professional services, from the preparation work in advance, to importing the vessel and assisting with customs clearance.
Accounting and Bookkeeping
Full due diligence support, to ensure all compliance requirements are met, and accounts are up to date.
Assistance with Crewing
Dixcart can draft and organise appropriate contracts and assist with payroll.
Ongoing Annual Registration requirements
Dixcart can continue to assist with the ongoing registration requirements in order to maintain documentation.
Corporate Services
Dixcart Cyprus offers a comprehensive range of management and secretarial services, including directorship arrangements, if needed.