| Resident taxpayers in Cyprus are taxed on all income acquired or derived from sources in Cyprus and abroad.
Non-resident taxpayers in Cyprus are taxed on income acquired or derived from sources in Cyprus only.
Resident taxpayers are persons who live in Cyprus for a total of more that 183 days in the taxation year.
Tax rates (natural persons):
- 0 per cent for the first £10 000
- £10 001-£15 000, rate of 20 per cent
- £15 001-£20 000, rate of 25 per cent
- £20 000 and over, rate of 30 per cent
The calculation of taxable income takes account of deductible items and discounts such as: subscriptions to trade unions, professional associations or donations to approved charities, National Insurance contributions, Pension Fund contributions, Relief Fund contributions, Life Insurance fees, etc.
Spouses are taxed separately on the basis of separate annual income tax returns.
Profits from the sale of shares are not subject to income tax.
Proceeds from the sale of real estate within the Republic and from the sale of shares in unlisted companies whose assets include real estate within the Republic are subject to a capital gains tax rate of 20 per cent.
Dividends are subject to a defence levy of 15 per cent if the shareholder is a taxable resident of the Republic. Where the dividend is from a foreign company, the levy may be reduced by the amount of tax withheld in the foreign country as well as with the proportion of tax and profit if the dividend comes from an EU Member State company.
The income of persons who are resident in the Republic from a pension for services provided outside the Republic is subject to a tax rate of 5 per cent. The first CY£2 000 are exempt. There is the possibility to choose the method of taxation and either be taxed at the lower 5 per cent rate or at normal rates. The choice is stated in the income declaration. Those interested are advised to contact the Foreign Incomes Department via fax no +357 22 66 1243 or e mail.
The rates of VAT vary according to the legislation on the basis of the type of product or service. The following rates are applied:
- zero rate (0 per cent)
- reduced rate (5 per cent)
- standard rate (15 per cent).
The delivery of a house, apartment or business premise, etc. for which planning permission was applied for after 1/5/2004 is subject to VAT at 15 per cent. Plots and land are exempt from VAT when sold without any form of building.
The TAXInet service provides the possibility to electronically submit Income Declarations. |
