More companies taking refuge from tax in Cyprus

The number of Polish companies incorporating on Cyprus is thought to have reached 1,000, and deals worth of several hundred million zloty have been completed in Poland this year alone involving Cyprus-based companies. Companies such as these are frequently used as middle men to buy stakes in other Polish firms, enabling the buyer to avoid paying 19% capital-gains tax and the 1% civil activities law tax. This is how Netia for example recently purchased a 22% stake in Play for EUR 22 million. Responding to growing demand, many consultancy firms operating in Poland, including the Big Four audit firms, are helping clients establish companies in Cyprus, which formally takes just 2 hours. There are also law firms in Cyprus offering services in Polish. Presumably because of its EU membership, Cyprus is not inlcuded on the list of 40 tax havens drawn up by the Polish finance ministry. However, according to unofficial information, Polish tax officials heavily scrutinize businessmen investing in Cyprus.  (Rzeczpospolita, p. B1) R.M.