Cyprus Taxation

The tax year in Cyprus is from 1st of January to 31st of December. If you live in Cyprus for more than 183 days in the financial year is required to pay tax on any income generated in Cyprus or from overseas. After you have obtained a residence permit in Cyprus you should also register at the local income tax office as a Cyprus taxpayer. In Cyprus the first CYP 10,000 per person is the tax-free personal allowance and after this, the following tax rates apply: 20% (for income CYP 10,001-15,000), 25% (for income CYP 15,001-20,000) and 30% (for over CYP 20,000).

Any retired person benefits from very favourable tax rates but retired people are not allowed to undertake any paid employment.

When Cyprus joined the EU, the VAT rate rose to 15% on many items. On other sources of income, such as bank interest and dividends from shares, no income tax is payable in Cyprus, although they do incur a Cyprus Defence Levy tax of between 10% and 15% depending on the type of income. Capital Gains Tax of 20% is payable on the sale of immovable property in Cyprus. No capital gains tax is payable on gains from investments.

Income taxation of companies depends on where they are managed and controlled, and for that reason companies registered in Cyprus but managed and controlled from another country, will only be taxed in Cyprus on their Cyprus-source income.

Cyprus has double taxation agreements with many countries and also UK.

Cyprus Taxation

About Cyprus