Business group in Cyprus, or rather in the Czech Republic?
26.03.2013Company: Amcham
Dark clouds are gathering over the Mediterranean. Cyprus rejected the bailout offer from the EU. Pulling out of the island may be the solution. Shall we stay at home?
Cyprus wanted to get about EUR 5.8 billion to support its banking sector through the bailout from the European Union in exchange for taxation of all bank deposits. The Cypriot Parliament postponed the final decision until Tuesday evening when it swept the proposal aside and rejected it. Negotiations on what will happen next have been going on since as Cyprus is not likely to do without the bailout.
We expect that in the end Cyprus will have to adopt much tougher measures that could revive the country’s economy. Therefore, it is possible that the income tax rate, currently the lowest in the European Union, will be increased, and so will be the “special contribution for defence”, if needed. Such measure would affect all companies having their registered offices in Cyprus.
Although Cyprus has been for a long time maintaining the reputation of a country with a stable tax system and advantageous tax regime, the question now is whether the economic crisis will shake this reputation and whether Cyprus will remain a European tax heaven, as the country is often nicknamed.
It is therefore appropriate to consider founding a business group elsewhere than in Cyprus, so popular up to now. Why not use the local environment?
What are the advantages of a Czech business group?
- Easy availability
- Communication in the Czech language
- Lower costs of founding a group and its administration than abroad
- Dividends paid between companies are exempt from tax
- Dividends for individuals are currently subject to withholding tax but they should also be exempt from tax in the future.
If you are interested in more details, please do not hesitate to contact us.
Kateřina Provodová, Head of RSM TACOMA Tax
Tel.: +420 226 219 000
E-mail: katerina.provodova@rsm-tacoma.cz
