Introduction

The use of the Internet for business has now moved to the next stage. Manufacturers and suppliers in producing countries remain liable to tax on production profits in the country of manufacture. By combing the internet with the virtual office of your Cyprus holding or subsidiary company, the marketing and distribution activities may be structured so that profits are accrued in Cyprus.

The internet has revolutionized the world, and the way we do business.

Today, almost all consumers of products and services comfortably accept the internet. In our opinion this is because internet payments have become rather safe. At the same time businesses reduce their expenses by efficiently using the internet, whereby reducing the cost of products and services to the ultimate end buyer or consumer.

The use of the Internet for business has now moved to the next stage.

Manufacturers and suppliers in producing countries remain liable to tax on production profits in the country of manufacture. By combing the internet with the virtual office of your Cyprus holding or subsidiary company, the marketing and distribution activities may be structured so that profits are accrued in Cyprus.

Ordering and supply needs would be dealt with on line from a web based trading platform, hosted in a central location, and therefore no permanent establishment, office or staff, will be required in the countries of ultimate delivery. This would not only optimize business management efficiencies but also avoid the provision of any basis on which to tax profits on the supply of goods delivered, other than VAT on the sale price.

Suppliers of internet delivered services and products within the European Union are required to charge VAT. Registration for VAT can be achieved by incorporation or registration within a single EU member state. As a result many businesses providing internet delivered services from outside the EU are choosing to register in Cyprus to benefit from a low VAT of (15%) in the EU. In addition, the 10% corporate tax gives Cyprus the lowest corporation tax in the EU.