Personal Income Tax


Basis of taxation

All Cyprus tax residents are taxed on all income accrued or derived from all sources in Cyprus and abroad. Individuals who are not tax residents of Cyprus are taxed on income accrued or derived from sources in Cyprus.

An individual is tax resident in Cyprus if he spends in Cyprus more than 183 days in any one year. Days in and out of Cyprus are calculated as follows:

(a) the day of departure from Cyprus counts as a day of residence outside Cyprus.

(b) the day of arrival in Cyprus counts as a day of residence in Cyprus.

(c) arrival and departure from Cyprus in the same day counts as one day of residence in Cyprus.

(d) departure and arrival in Cyprus in the same day counts as one day of residence outside Cyprus.

Personal tax rates

The following income tax rates apply to individuals:

Chargeable income (CYP) Tax Rate (%) Accumulated tax (CYP)
£0 – £10.000 - -
£10.001 – £15.000 20 £1.000
£15.001 – £20.000 25 £2.250
over £20.000 30 4.0

 

 

 




Foreign pension is taxed at the rate of 5%. An annual exemption of £2.000 is granted.

Exemptions

The following are exempt from income tax:

Type of income Exemption limit

  • Dividends The whole amount
  • Interest The whole amount
  • Capital sums accruing to individuals The whole amount from any payments to approved funds (e.g. provident funds)
  • Lump sum received by way of retiring The whole amount gratuity, computation of pension or compensation for death or injuries.
  • Deposits with Housing Finance 40% of the amount Corporations deposited. The amount deposited cannot exceed 25% of a person’s total income.(This exemption applies for deposit schemes that existed as at 30 April 2003)
  • Remuneration from any office or 20% of income with employment exercised in Cyprus by a maximum amount an individual who was not resident of Cí5.000 annually of Cyprus before the commencement of his employment, for a period of 3 years commencing from 1st January following the year of commencement of the employment Remuneration from salaried The whole amount 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
  • Profits of a permanent establishment The whole amount abroad under certain conditions
  • Profits from the sale of securities * The whole amount

    * Securities is defined as shares, bonds, debentures, founders’ shares and other securities of companies or other legal persons, incorporated in Cyprus or abroad and options thereon.

Tax deductions

The following are deducted from income:

  • Contributions to trade unions or The whole amount professional bodies
  • Donations to approved The whole amount charities (with receipts)
  • Expenditure incurred for the maintenance Up to £200, £300of a building in respect of which there or í350 per square is in force a Preservation Order meter (depending on the size of the building)
  • Rental income 20% of rental income
  • Loss of current year and previous The whole amount years
  • Social Insurance, provident fund, Up to 1/6 of the medical fund, pension fund chargeable income contributions and life insurance premiums (the allowable annual life insurance premium is restricted to 7 per cent of the insured amount)

Social grants

The following social grants are given:

  • Grant of £1.500 per annum for every child receiving full time higher education in Cyprus (with certain restrictions) or full time university education outside Cyprus.
  • Grant of £1.800 per annum for blind persons.
  • All families resident in Cyprus fulfilling the provisions of the Law, are entitled to a basic child grant, whereas those families that had a gross family (applicant, spouse, children) income, for the year 2002 below £18.000 are entitled to an additional child grant as indicated in the table below.
Number of children in the family Basic annual grant Additional annual grant for families with an annual income up to £9.000 Additional annual grant for families with an annual income greater than £9.000 and up to 18.000
1 child 213 53 26
2 children 426 213 159
3 children 1278 479 399
More than 3 children 639 per child 213 per child 133 per child

 
















Upon application, the applicants do not need to submit any proof/evidence of their income, unless it is the first time claim.

The above mentioned social grants were available during the year 2005. At the time of writing of this publication, no information was available for year 2006.Cyprus is unique when it comes to the taxation aspects of living on the island.

Legal & Financial
Residence Permit
Property Ownership
Mortgage Finance
Transfer of Ownership
Immovable Property Tax
Capital Gains Tax
Stamp Duty
Value Added Tax
Transfer Fees
Personal Income Tax
Double Tax Treaties
Duty Free Benefits
Insurance

 

 
Importan Links
Cyprus Project Map
Climate
Disclaimer
Newsletter
Instant Support
Quick Contact
Social Network
 
   
  ©2013 LNAS Developers.