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Main Tax issues

Personal Income Tax

Individuals who are not tax residents of Cyprus are taxed on certain income accrued or derived from sources in Cyprus.

All Cyprus tax residents are taxed on all chargeable income accrued or derived from all sources in Cyprus and abroad. A person is regarded to tax resident in Cyprus if he/she spends in Cyprus more than 183 days in any calendar year. 

 

Taxable Income €   % Tax € 

 Cumulative Income €

Cumulative 
 0-19.500  0  - 19.500 
 19.501-28.000  20 1.700  28.000  1.700 
 28.001-36.300  25 2.075  36.300  3.775 
 36.301-60.000  30 7.110  60.000  10.885 
 Over 60.000  35

 Personal Allowances

1 Interest Income  100% 
2 Dividend income 100% 
3 Profits from sale of shares 100% 
4  Widow pensions & Retirement lump sum 100% 
5 Amounts deposited under an approved scheme of the Housing Finance Corporation (with restrictions) 40% 
6 Rental income from a preserved building (with conditions) 100% 
7 Overseas pensions (tax rate of 5 % for over € 3.418) €3.418 Maximum
8 Emoluments from the provision of services to a permanent establishment abroad for a total period of at least 90 days in aggregate 100% 
9 Emoluments of an individual in Cyprus in the case that prior tothe employment in Cyprus he/she was a non-Cyprus resident (valid for 3 years starting the 1st of January following the year of his/hers employment) The lower of 20% of the emoluments and €8.543 annually
10 Profits from a permanent establishment overseas 100% 
11   Persons who are not resident and non-tax resident in Cyprus and now have income more than €100.000 from employment in Cyprus 50% of Income from employment in Cyprus for the first 5 years

 

 Deductions For Individuals

 

1 Social insurance deductions, pensions, contributions of a general medical funds, annual life assurances (up to 7% of the insurable amount), provident funds (with restrictions)  Restricted to 1/6 of the taxable income. 
2 Donations & subscriptions (with receipts) to approved charitable foundations 100%
3 Subscriptions to trade unions and professional associations 100%
4 Tax losses of current and prior years in the case where audited financial statements are prepared 100%
5 Rental income of immovable property. 20% on gross rental income, wear & tear allowances and loan interest.
6 Expenditure incurred for the maintenance of a building in respect of which there is in force a Preservation Order (with conditions) Up to €1.200, €1.100 or €700 per square meter (depending on the building area).

 

Corporation Tax Rates

Cyprus Tax Resident Companies are those which are managed and controlled in Cyprus.These are taxed on profits based on their income accrued or derived from all sources in Cyprus and abroad.

Non-resident Companies are taxed on income accrued or derived from a business activity which is carried out though a permanent establishment in Cyprus and on certain income arising from sources in Cyprus.

Foreign taxes paid can be credited against the corporation tax liability.

Companies  12,5% 
Life Insurance Companies 1.5% of gross premium