TAXATION OF HOLDING COMPANIES
In order that the dividends paid to the Cyprus
holding company qualify for the exemption from
withholding tax the following conditions should
apply:
— such holding company should own at least 1
% of the authorized capital in affiliated company
abroad
— in addition the income received from the foreign
subsidiary of the Cyprus holding should
not exceed 50 % of investment income.
The Cyprus holding company in turn can
pay the received dividends to the non-resident
shareholders (for example to the tax-free company
from B.V.I.) without payment of 15 % of the Cyprus
Special Tax to Defence.
