Immovable property outside Cyprus
Dealing in immovable property in other treaty countries constitutes business profits as far as the absence of a permanent establishment can be shown by the Cyprus IBC.  The absence of the permanent establishment can be achieved by the use of an independent agent.  This is frequently used in the case of immovable property in the United Kingdom.

An immovable property is held by an IBC for two reasons:-

For trading
The double tax treaties of Cyprus provide that no income tax or capital gains tax is payable in that other country (USA and Canada excluded).

If the profit received in Cyprus is deemed as income is taxed at the rate of 10% and if is deemed of a capital nature the tax is nil.

For investment
The sale of shares in the IBC holding the immovable property may in some cases result to extraction of gains without the payment of tax (especially in the case of United Kingdom).

Immovable property in Cyprus
IBC’S
IBC’S in Cyprus are not allowed to hold immovable property in Cyprus other than their own offices and premises for the residence of their foreign employees provided they maintain a fully fledged office.  Any gain on disposal of such premises is taxed at the capital gains tax rate of 20%.

Individuals
On disposal of the property, there will be capital gains tax at the rate of 20% on the gain. The first C£10.000 (or C£50.000 in the case of one’s private residence) is exempt.