NFT Trading in Cyprus

NFT stands for “non-fungible token”

In blockchain, fungible tokens are cryptocurrencies like Bitcoin (BTC) or ETHEREUM (ETH).

Nonfungible tokens (NFTs) are units of data that represent a unique digital asset stored and verified on the blockchain.

NFTs can also be related to physical collector’s items, however, the apparent distinction between them is that they are digital and the fact that they are unique. While at the same time Fungible Tokens (FTs) which are “traditional” money – FIAT currencies like the dollar are divisible and non-unique. A $1 dollar bill in one state of the US has exactly the same value in another state of the US.

If a buyer wishes to purchase a one-of-a-kind oil painting through the form of an NFT, they will conduct the transaction and subsequently receive their item as a digital file for which they and only they can be the owner. They will not receive a physical painting.

In order to purchase an NFT, one must initially establish a digital wallet wherein NFT’s and cryptocurrency alike may be stored.

In essence, whatever item is one-of-a-kind it is an NFT. Whatever is not a one-of-a-kind it is an FT.

Of course you can!

Yes! It is at 12.5%, one of the lowest Corporate tax rates in Europe.

However, as with crypto currency trading, by holding an NFT you do not pay any tax on the appreciation of its value but only on the realized profit when sold.

Of course, no taxes are due when purchasing NFTs.

Cryptocurrencies and NFTs are not “titles” for tax purposes and as such, any realized gains from the purchase and sale of Cryptocurrencies of a trading nature are taxable in Cyprus at the rate of 12,5%.

The after tax profit remaining in the Cyprus Company from NFT trading can be distributed by way of dividends to the shareholders with 0 withholding taxes.

Profits within the Cyprus Company belonging to foreign individuals can remain in the Company totally tax free and might as well be reinvested in various other projects such as start-ups by way of Venture Capital, property, financial instruments or any other investment.