Personal Tax

Taxation of Individuals depends on their resident status.

Cyprus Tax resident is the individual who is resident more than 183 days in a year of assessment, in the Republic.  Tax Residents are taxed on their worldwide income.

On the other hand Non Tax Residents are liable to tax only on the income that they earned in Cyprus.

The income tax rates that are applied for individuals

Taxable Income

Tax Rate

%

Accumulated Tax

0 – 19.500

NIL

NIL

19.501-28.000

20

1.700

28.001-36.300

25

3.775

 36.301-60.000

30

7.110

Over 60.001

35

Tax Exceptions

The following are exempted from income tax:

  • Interest income.

  • The entire amount but subject to Defense Contribution at 10% if the individual is a Tax Resident. Most of the times
  • are deductible at source. Cyprus Banks deduct the defense before they affect the bank account.
  • Dividends income.

  • The entire amount but subject to Defense Contribution at 15% if the individual is a Tax Resident.

  • Lump sum received under the shape of bonus on retirement, pension death or as a reimbursement on death or injury. The entire amount.

  • Capital Sum received from insurance or approved provident fund. The entire amount.

  • Capital earned from the sale of immovable property. The entire amount.

  • Profits from a sale of shares of a company that is Cyprus Tax Resident and furthermore owns property in Cyprus.
  • The entire amount but liable for Capital Gain Tax.

  • Deposits with Housing Finance Corporation

  • The limit exception is the 40% of the amount deposited which also does not exceed the 25% of the individual’s total income.

  • Compensation from salaried 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. The entire amount.

  • Individuals who were not Cyprus residents before the commencement of their employment are allowed after the first year of employment an exception of 20% of their emoluments or €8550 per year whichever is lower. This exception can be applied for 3 years commencing from the 1st of January following the first year of employment.The entire amount.
  • Tax Deductions

    The following are deducted from income:

  • Social Insurance, provident fund, medical fund, pension fund contributions and life insurance premiums. -The amount that can be deducted is limited to 1/6 of taxable income.

  • Contributions to trade unions or professional bodies. -The entire amount can be deducted.

  • Donations to approved charity foundations (receipts required). -The entire amount can be deducted.

  • Expenditure incurred for the maintenance of listed buildings for which there has to be either a Preservations order or certificate by the Minister of Interior that the expenses are in respect of preservation work for restoring the building. – The amount that can be deducted depends from the size of the building and can be €512.58 or €854.30 or €939.73 per square meter.

  • Rental income. The following can be deducted for Rental income.

  • 20% of gross rental income

  • Interest paid for acquisition of the rental income property.

  • 3% on the property value less land cost.
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