Reference

Cyprus Corporate & Tax Glossary

A comprehensive A–Z reference of terms you will encounter when forming and managing a Cyprus company, navigating tax obligations, and dealing with regulatory bodies.

A C D G H I K M N O P Q S T U V W Y

ARC (Alien Registration Certificate): Also known as the Yellow Slip. The registration certificate issued to EU/EEA nationals residing in Cyprus, confirming their right to live and work on the island.
AGM (Annual General Meeting): A mandatory yearly meeting of a Cyprus company’s shareholders. The AGM must be held within 18 months of incorporation and every calendar year thereafter. It approves accounts, appoints auditors, and elects directors.
AML (Anti-Money Laundering): The body of regulations and procedures designed to prevent the use of the financial system for money laundering. In Cyprus, AML obligations are governed by the Prevention and Suppression of Money Laundering Activities Law.
ATR (Advance Tax Ruling): A binding ruling issued by the Cyprus Tax Department on the tax treatment of a proposed transaction. Commonly used for IP Box structures, transfer pricing arrangements, and cross-border reorganisations.

CIT (Corporate Income Tax): The tax levied on the net profits of companies. The Cyprus CIT rate is 15% (increased from 12.5% effective 2026), one of the lowest in the EU.

DDD (Deemed Dividend Distribution): A mechanism that deemed 70% of after-tax profits distributed as dividends after 2 years, triggering SDC. Abolished from 1 January 2026 for profits arising from 2026 onwards. Pre-2026 profits may still be subject to old rules.
DRCOR (Department of the Registrar of Companies and Official Receiver): The government department responsible for registering companies, partnerships, and business names in Cyprus. It maintains the public register and processes annual returns (HE32).

GESY (General Healthcare System): Cyprus’s universal healthcare system, operational since 2020. Both employers and employees contribute a percentage of earnings. All Cyprus tax residents are eligible to register.

HE1: The application form for registering a new private limited company with the Registrar of Companies in Cyprus. Submitted together with the M&AA, HE2, and HE3.
HE2: The statutory declaration by the company secretary or advocate confirming compliance with the Cyprus Companies Law upon incorporation.
HE3: The notice of the registered office address and the first directors and secretary of a newly incorporated Cyprus company, filed alongside HE1.
HE32: The annual return filed by every Cyprus company with the Registrar. It confirms the company’s directors, shareholders, registered office, and share capital. Due within 28 days of the AGM.

IP Box: A tax incentive regime that grants an 80% deduction on qualifying profits derived from intellectual property (patents, copyrighted software, and other qualifying intangible assets). The effective CIT rate is approximately 3% when the Nexus Fraction is 100%.
IR1: The personal income tax return form filed by individuals who are Cyprus tax residents. Due annually, typically by 31 July of the year following the tax year (electronic filing).
IR4: The corporate income tax return form filed by Cyprus companies. Due within 15 months after the end of the tax year, filed electronically via TAXISnet.
IR6: The employer’s annual return summarising all emoluments paid to employees during the tax year, along with tax withheld under PAYE. Filed by 30 April following the tax year.
IR7: The self-assessment form used by individuals with income not subject to PAYE, including rental income, dividends (where applicable), and business profits.

KYC (Know Your Customer): The process of verifying the identity of clients and beneficial owners. Required by Cyprus law for company formation, bank account opening, and regulated services.

M&AA (Memorandum and Articles of Association): The constitutional documents of a Cyprus company. The Memorandum defines the company’s objects and authorised share capital; the Articles govern internal management, share transfers, and meeting procedures.

Nexus Approach: The OECD-endorsed method for calculating the IP Box benefit. The qualifying profit deduction is proportional to the ratio of qualifying R&D expenditure (own or unrelated third-party) to total R&D expenditure.
NID (Notional Interest Deduction): A deduction allowed against taxable income equal to a reference interest rate applied to new equity introduced into a Cyprus company. Designed to reduce the tax bias toward debt financing.
Non-Dom (Non-Domiciled Status): A status available to individuals who are tax resident in Cyprus but not domiciled there. Non-Dom individuals are exempt from Special Defence Contribution (SDC) on dividends, interest, and rental income for 17 years.
Nominee Director: A person appointed as a director of a Cyprus company on behalf of the beneficial owner. Used for privacy or to satisfy local director requirements. The nominee acts under a service agreement and has no beneficial interest.

OSS (One-Stop Shop): An EU VAT simplification scheme allowing businesses to report and pay VAT on cross-border B2C supplies of services and distance sales of goods through a single online portal in their member state of registration.

Pillar Two: The OECD/G20 global minimum tax framework ensuring multinational groups with consolidated revenue above EUR 750 million pay an effective tax rate of at least 15% in each jurisdiction. Cyprus transposed Pillar Two via the GloBE Directive.
Pink Slip: The common name for the temporary residence permit for non-EU nationals issued to non-EU nationals employed in Cyprus. Officially a combined single permit under the Civil Registry and Migration Department.

QDMTT (Qualified Domestic Minimum Top-Up Tax): A domestic top-up tax introduced under Pillar Two that allows Cyprus to collect any shortfall between a group’s effective tax rate and the 15% minimum, before other jurisdictions apply their own top-up taxes.

SDC (Special Defence Contribution): A tax levied on dividends, interest, and rental income received by Cyprus tax residents who are domiciled in Cyprus. Rates from 2026: 5% on dividends (down from 17% pre-reform), 17% on interest, 3% on rental income (75% of gross). Non-Domiciled individuals are exempt from SDC on dividends and interest for up to 17 years; rental SDC still applies. Last reviewed April 2026.
Stamp Duty: A tax on certain documents executed in Cyprus, including contracts, share transfers, and property conveyances. Rates range from 0.15% to 0.20% of the contract value, capped at EUR 20,000.

TAXISnet: The electronic tax filing and payment portal operated by the Cyprus Tax Department. Used for CIT returns (IR4), personal returns (IR1), VAT returns, and VIES declarations.
TRC (Tax Residency Certificate): A certificate issued by the Cyprus Tax Department confirming that a person or company is tax resident in Cyprus. Essential for claiming double tax treaty benefits in other jurisdictions.

UBO (Ultimate Beneficial Owner): The natural person who ultimately owns or controls a company. Cyprus companies must maintain a UBO register, and the information is filed with the relevant authorities under AML regulations.

VIES (VAT Information Exchange System): An EU electronic system for verifying VAT registration numbers and reporting intra-EU B2B supplies of goods and services. Cyprus companies making intra-EU supplies must file VIES declarations.

WHT (Withholding Tax): A tax withheld at source on payments such as dividends, interest, and royalties. Cyprus imposes 0% WHT on all outbound payments to non-residents, regardless of treaty status.

Yellow Slip: The colloquial name for the Alien Registration Certificate (ARC) issued to EU/EEA citizens registering their residence in Cyprus. Required for stays exceeding 3 months.

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Cyprus Corporate & Tax Glossary

Glossary Terms

Need Help With Your Cyprus Company?

Cyprus Corporate & Tax Glossary

Glossary Terms

Need Help With Your Cyprus Company?