Taxation of Individuals

Only general Information on taxation in Cyprus is supplied on this page.

Individuals who are Cyprus tax residents, that is, individuals who, in the year of assessment, always a calendar year, stay in the Republic of Cyprus for a period or periods exceeding in aggregate 183 days, are subject to tax on their worldwide income, whether remitted to Cyprus or not.

Individuals who are non-Cyprus tax residents, that is, individuals who, in the year of assessment, always a calendar year, do not stay in the Republic of Cyprus for a period or periods exceeding in aggregate 183 days, are subject to tax only on their Cyprus-source income.

The tax rates are as follows:

For years till the year of 2007

%

Tax year

1991 – 1995
£ (Cyprus pounds)

1996 – 1999
£ (Cyprus pounds)

2000 – 2001
£ (Cyprus pounds)

2002
£ (Cyprus pounds)

2003
£ (Cyprus pounds)

2004 – 2006
£ (Cyprus pounds)

2007
£ (Cyprus pounds)

0%

0 – 2 000

0 – 5 000

0 – 6 000

0 – 9 000

0 – 9 000

0 – 10 000

0 – 10 750

20%

2 001 – 4 000

5 001 – 8 000

6 001 – 9 000

-

9 000 – 12 000

10 001 – 15 000

10 751 – 15 750

25%

-

-

-

-

12 001 – 15 000

15 001 – 20 000

15 751 – 20 600

30%

4 001 – 8 000

8 001 – 11 000

9 001 – 12 000

9 001 – 12 000

≥ 15 001

≥ 20 001

≥ 20 600

40%

≥ 8 001

≥  11 001

≥ 12 001

≥ 12 001

 

 

 


For the year 2008 and thereafter

 

Tax year

%

2008 - 2010

€ (Euro)

From  2011

€ (Euro)

0%

0 – 19 500

0 – 19 500

20%

19 501 – 28 000

19 501 – 28 000

25%

28 001 – 36 300

28 001 – 36 300

30%

≥ 36 301

36 301 - 60000

35%

-

≥ 60 001

 

EXEMPT INCOME (mainly)

Type of income

Limit

Note

Widows pensions under an approved scheme

100%

 

Profits on disposal of shares

100%

 

Dividend income

100%

 

Interest income

100%

1

For a period of three years, salaries and wages derived from employment in Cyprus by a person who was not a Cyprus resident immediately before the commencement of his employment

Emoluments up to 20%  maximum of €8.550

2

For a period of five years, salaries and wages which exceed the amount of €100.000 per annum and are derived from employment in Cyprus by a person who was not a Cyprus resident immediately before the commencement of his employment, are tax exempted by 50%.

50%

 

Salaries and wages received from outside Cyprus are tax exempted provided that such income is derived from employment from a non-Cyprus Tax employer and the employment is for a period that exceeds the aggregated period of 90 days in the tax year

100%

 

Lump sum on retirement, commutation of pension, or compensation for death or personal injury

100%

 

Dividends received

100%

3

Individuals receiving foreign pensions

May choose to be taxed:

Up to € 3.420 0%.

Over € 3.420 5%.

 

Expenditure for the maintenance of buildings under preservation order

up to €700, €1.100 or €1.200 per sq. m. (depending on the size of the building).

 

Capital sums received in respect of approved life insurance policies or provident, pension and other funds

100%

 

Notes

  1. Excludes interest arising from or closely related to the ordinary carrying on of a business.
  2. The exemption applies for a period of three years, commencing on 1 January following the year of employment.
  3. Subject to Special Contributions for Defence at the rate of 20%

PERSONAL ALLOWANCES

Description

Limit

Note

Life insurance premiums

100%

1&2

Contributions to the Social Insurance Fund

100%

2

Contributions to approved provident, pension, medical or other funds

100%

2

Notes 

  1. Provided that life insurance premiums do not exceed 7% of the capital sum assured on death. In case of early cancellation of a life insurance policy, a percentage of the premiums which were previously allowed as a deduction is taxable.
  2. The total deduction for all above allowances is restricted to 1/6 of an individual's chargeable income before deducting these allowances.

TAXABLE LOSSES

 Taxable losses of a taxpayer, as well as of that of an individual who changes his personal enterprise to a limited liability company, are carried forward and are deductible from taxable income of the next five years from which such loses were incurred. Tax losses from the tax year 2007 can be transferred and used till 2012. Tax loss of the year 2006 can only be used till 2011.

Losses arising from a permanent establishment maintained outside the Republic can be offset against profits arising in the Republic. However, when a profit arises from such a permanent establishment, an amount equal to the losses that have been utilised in the past against profits arising in the Republic will have to be taxed in the year in which such a profit is realised

 

 

Contact us at:

Yiannis Kyriakides - Chartered Accountants

15 Elision Pedion
6043 Larnaca
Cyprus

Phones: +357-24-662956
Fax: +357-24-662896
E-mail:  info@cyprusauditors.com

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