Cyprus is not typically considered a traditional tax haven jurisdiction for several reasons:
1. **Legislation and Regulation**: Cyprus has implemented various measures to comply with international tax standards and combat tax evasion. It is a member of the European Union and follows EU directives and regulations related to taxation and financial transparency.
2. **Corporate Tax Rate**: While Cyprus offers a competitive corporate tax rate of 12.5%, which is lower than many other countries, it is not as minimal as the tax rates offered in some traditional tax haven jurisdictions.
3. **Transparency**: Cyprus has committed to enhancing transparency in its tax system and financial sector. It has implemented measures such as the Common Reporting Standard (CRS) and the Automatic Exchange of Information (AEOI) to facilitate the exchange of financial information with other countries to prevent tax evasion.
4. **Double Tax Treaties**: Cyprus has a network of double tax treaties with numerous countries, which is not typically associated with tax haven jurisdictions. These treaties aim to prevent double taxation and promote cooperation in tax matters.
5. **Economic Substance Requirements**: Cyprus has introduced economic substance requirements to ensure that companies operating in the country have genuine business activities and substance. This helps prevent the use of Cyprus solely for tax avoidance purposes.
Overall, while Cyprus offers certain tax advantages and a favorable tax regime, it is generally regarded as a low-tax jurisdiction rather than a traditional tax haven due to its commitment to transparency, compliance with international standards, and efforts to prevent tax evasion.
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