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Annual results
I. ANNUAL RESULTS WITHOUT THE USE OF A CYPRUS COMPANY

The company Economic GmbH (Germany) imports toothpicks from China and sells them to various countries in the EU.
I.A. Pre-tax results for 2003 100 000 EUR
I.B. Corporate tax (25%) 25 000 EUR
I.C. Results after tax 75 000 EUR


II. ANNUAL RESULTS USING A CYPRUS COMPANY

The company Economic Ltd. (Cyprus) imports toothpicks from China and sells them to various countries in the EU.
II.A. Pre-tax results for 2003 100 000 EUR
II.B. Corporate tax (10%) 10 000 EUR
II.C. Results after tax 90 000 EUR


III. Difference between the two
II.C. Results after tax – Economic Ltd. (Cyprus) 90 000 EUR
I.C. Results after tax – Economic GmbH (Germany) 75 000 EUR
III.C. Difference 15 000 EUR


It is quite clear, therefore, that even with a relatively “modest” profit, the difference which arises between the two levels of profit, thanks to the tax savings, is significant enough to cover the costs of establishing and running the company in Cyprus. If we then add to this, for example, the taxes payable on the payment of dividends, then the difference will be even more startling as the withholding tax payable by foreigners in Cyprus is 0%!

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