Cyprus: Taxation Of Betting Companies

Circular 2016/14,¹ issued by the Tax Department on September 29 2016, clarifies the taxation arrangements for companies which provide betting services under a licence issued by the National Betting Authority in accordance with the Gambling Law 2012.²

Such companies are not subject to income tax on profits or gains arising from the services they provide if:

• they are not resident in Cyprus (ie, they are controlled and managed from outside Cyprus); and
• they have no permanent establishment in Cyprus, because they provide their services by automated electronic means.

A back-up server installation within Cyprus will not be deemed to constitute a permanent establishment. The circular clarifies that, despite the tax exemption, Article 5A of the Assessment and Collection of Taxes Law 1978, as amended, continues to apply to such companies.³ Under Article 5A:

• a company must register for tax immediately after incorporation or registration under any law in force in Cyprus; and
• companies that are incorporated in Cyprus, but not tax resident, must submit annual income declarations in the prescribed form.

Footnotes

1 Available here in Greek.

2 Law 106(I)/2012.

3 Law 4/1978.

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