Profits from a permanent establishment abroad are exempt from taxation in Cyprus.  This together with Cyprus’ extensive treaty network can result in such profits becoming free of taxation altogether.  The 0% tax effect can be achieved when, for example, a Cyprus company carries out a project (construction, assembly, etc) in a foreign country lasting more than 3 months (which is the minimum period to satisfy the permanent establishment criteria in accordance with the Cypriot law) but which does not last for more than 12 months (which per the DTT is the minimum period for establishing a p/e in the latter Contracting State e.g. Czech Republic, Russia).  In such a case a p/e would be created in Cyprus, in accordance with the Cypriot legislation and any profits derived there from would be tax exempt, whereas in the latter State no p/e would be created and hence there would be no right of taxability.