The tax of insurance business in Cyprus is subject to special tax provisions. Life and General insurance are treated differently; Insurance Agents and Brokers are taxed like any other Cyprus Company.
Different rules apply to life and general insurance business.
The income tax payable is the greater of:
Income tax on accident and health insurance business and other financial services in Cyprus is calculated at:
15%
of the taxable income of the year (2026 rate).
Cyprus Insurance Agents and Brokers are taxed like any other Cyprus company.
Payroll taxes apply: the employer pays Social Security Contribution and NHS on gross remuneration. Branch profits will not be taxed in Cyprus if taxed abroad (examined by our tax experts).
Carried forward and offset against taxable income of the next five years from the reporting date.
Group surrender applies: parent and subsidiary profits can be offset. Branch losses must offset parent company profits.
Insurance services are exempt from VAT, therefore VAT cannot be recovered.
Expenses are booked gross of VAT in the insurance company's or agency's books.
Subject to local tax regulations and transfer pricing studies, UK profits are taxed in the UK and the result is incorporated into the Cyprus Insurance Broker Company.
Greek branch losses are also incorporated, and the combined result is taxed in Cyprus. Double tax treaties between Cyprus, the UK and Greece ensure branch profits are not taxed twice and losses can be surrendered.
Both the UK and Greek subsidiaries are taxed locally. Their profits flow to the Cyprus parent without further tax, then are re-distributed to shareholders based on their tax residency:
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