|
Taxation
Cyprus tax residents
are taxed on their worldwide income, that is, accrued or derived
from all sources in Cyprus and abroad. Non-tax resident individuals
are taxed on income accrued or derived from sources in Cyprus only.
Cyprus tax residents
An individual is considered to be tax
resident in Cyprus if he stays in Cyprus more than
83 days during
the year of assessment.
Tax residents are taxable on the
following income:
Income from business in Cyprus and
overseas.
Income from any office or employment.
Dividends and interest.
Rents and royalties in Cyprus and abroad.
Pensions and annuities in Cyprus.
Non-tax residents
Non-tax residents are taxable on the
following income:
Income from a permanent establishment
situated in Cyprus.
Income from any office or employment
exercised in Cyprus.
Pensions derived from past employment
exercised in Cyprus.
Rent from property situated in
Cyprus.
Any amount or consideration in
respect of any trade goodwill reduced by any amount
incurred for the
purchase of such trade goodwill
The gross income derived by an
individual from the exercise in Cyprus of any profession
or vocation
the remuneration of public entertainers and the gross receipts of
any
theatrical, musical or other group of public entertainers.
Personal tax rates
Tax rates applicable
to individuals:
|
Chargeable Income |
Chargeable Income |
Amount of Tax |
Accumulated Tax |
|
€ |
% |
€ |
€ |
|
|
|
|
|
|
0 – 19,500 |
Nil |
Nil |
Nil |
|
19,501 – 28,000 |
20 |
1,700 |
1,700 |
|
28,001 – 36,300 |
25 |
2,075 |
3,775 |
|
Over 36,300 |
30 |
|
|
Foreign pension is taxed
at the rate of 5%. An annual exemption of €3,417.20 is granted.
Exemptions from
income tax
|
Type of Income |
Exemption Limit (%) |
|
|
|
|
Income from interest, unless
falls within the ordinary activities is not exempted. |
100 |
|
Income from dividends. |
100 |
|
Deposits with Cyprus Finance
Corporations. The amount deposited cannot exceed the 25% of
a persons total income |
40 |
|
*Profits from the sale of
securities. |
100 |
|
Lump sum payment on
retirement, computation of pension or compensation for death
or injuries. |
100 |
|
Capital sums from life
insurance or approved provident funds. |
100 |
|
Profits of a permanent
establishment abroad under certain conditions. |
100 |
|
Remuneration for salaried
services rendered outside Cyprus for more than 90 days in a
tax year to a non-Cyprus resident employer or to a foreign
permanent establishment of a Cyprus resident
employer.
|
100 |
|
Remuneration from any office
or employment exercised in Cyprus by an individual who was
not resident of Cyprus before commencement of his
employment, for a period of 3 years commencing from 1st
January following the year of commencement of the
employment. |
20 or €8,543.01
(lower of) |
|
Widow’s pension |
100 |
|
Income from scholarship or
other educational endowment |
100 |
* Securities are defined as shares,
bonds, debentures, founder’s shares and other
securities of companies or other
legal persons, incorporated in Cyprus or abroad
and options thereon.
Tax Deductions from Income
|
|
Deduction limit (%) |
|
|
|
|
Contributions to trade unions
or professional bodies |
100 |
|
Rental income |
20% of the rents |
|
Interest paid in respect of
rented buildings |
100 |
|
Loss of current year and
previous years |
100 |
|
Donations to approved
charities |
100 |
|
Expenditure incurred for the
maintenance of a building in respect of which there is in
force a preservation order |
Up to €512.58, €854.30 or
€939.73 per square meter (depending on the size of the
building) |
|
Social insurance, provident
fund, medical fund, pension fund contributions and life
insurance premiums (the allowable annual life insurance
premium is restricted to 7% of the insured amount) |
Up to 1/6 (of the
chargeable income)
|
|
In the case of cancellation
of a life insurance policy within 6 years from the day its
issue, a percentage of the premiums, which were previously
allowed, is taxable.
Cancellation
within 3 years
Cancellation
from 4 to 6 years |
30
20 |
|
Self employed individuals |
11.6% |
|
|
|
Employee |
6.3% |
|
|
|
Employer |
6.3% |
|
|
|
Employer’s contribution to
the Redundancy Fund |
1.2% |
|
|
|
Employer’s contribution to
the Industrial Training Fund |
0.5% |
|
|
|
It is imposed on the whole
salary. |
|
|
|
|
Employer’s contribution to
the Social Cohesion Fund |
2.0% |
|
|
|
Employer’s contribution to
the Holiday Fund (if it is not exempt) |
8.0% |
|
|
|
Maximum limit of emoluments |
|
|
|
|
The maximum level of annual
income in which social |
|
|
|
|
insurance contributions are
paid on is as follows. |
|
|
|
|
|
Per week |
Per month |
Per year |
|
Weekly employees |
885 |
- |
46,020 |
|
Monthly employees |
- |
3,836 |
46,032 |
|
Minimum limit of emoluments
for self-employed |
|
|
|
|
The lower limits of income on
which self-employed |
|
|
|
|
persons pay social insurance
contributions are: |
|
|
|
|
Persons exercising a
profession: |
|
|
|
|
- for a period under 10 years |
|
|
16,900 |
|
- for a period over 10 years |
|
|
33,956 |
|
Wholesalers, estate agents,
insurance agents, manufacturers and other businessmen |
|
|
33,956 |
|
Builders and other related
businesses |
|
|
20,592 |
|
Technicians and other persons
working in urban Areas |
|
|
16,432 |
|
Drivers of transportation
media, operators of excavators and similar occupations |
|
|
16,432 |
|
Farmers, stock breeders,
fishermen and other |
|
|
|
|
related activities, traveling
salesmen and priests |
, |
|
11,388 |
|
Persons not under any other
occupation |
|
|
16,432 |
|
