Cyprus Taxation Information
Cyprus taxation information: Business environment and low taxation.
(The details below are advisory only, IT IS UP TO YOU TO CHECK YOUR OWN TAX POSITION)
Cyprus has significant tax benefits for non-domiciled persons. From January 2003 changes to the tax system take effect. The tax year in Cyprus is the calendar year. Husband and wife are taxed individually.
One important change to the Cyprus taxation information is that up to January 2003 there was no minimum period of stay in Cyprus before being regarded as a tax resident. As from January 2003 you will be regarded as “tax resident” if you spend more than 182 days in a calendar year on the island. A part of a day counts as a whole day. Spending less than 183 days, from January 2003 you will not be regarded as resident for tax purposes. To take advantage of the Double Taxation treaty Cyprus has with the UK you will have to be in Cyprus for more than 182 days.
The Cyprus taxation information below is intended as a guide only and advice should always be sought from a qualified advisor. No responsibility will be accepted by living-cyprus.com for errors or omissions. The advice is CHECK first.
| Tax scale rates | 2003 | 2004 |
| Standard Income tax rates from 2003. |
Upto cy£9,000 @ 0% cy£9001 – 12000 @ 20% cy£12,001 – 15000 @ 25% Over cy£15,000 @ 30% |
Upto cy£9,000 @ 0% cy£9001 – 12000 @ 20% cy£12,001 – 15000 @ 25% Over cy£15,000 @ 30% |
| Tax changes due to EU entry |
Before 1st January 2003 | After 1st January 2003 |
| Pension income tax rate | 5% over cy£2000 with an option to choose the standard rate. “Based on remittances to Cyprus” | 5% over cy£2000 or choose the standard rate based on “World Wide income” |
| Pension income | This applies once you are classed as resident for tax purposes, i.e. once you have been in Cyprus for more than 182 days in a calendar year. The days do not have to be consecutive! | Income from pensions for employment outside of Cyprus, is taxable on a world wide basis, and you can choose which method is best for you. The rate above or use the standard rate as at the top of the table. Note the rates change in 2004 |
| Bank interest Tax rate | 5% over cy£2000 based on remitted funds | 10% based on world wide income |
| Dividends | 5% over cy£2000 based on remitted funds | 15% world wide less taxes paid overseas if any |
| Wealth Tax | None | None |
| Capital gains tax on:
Cypriot home: |
First cy£50,000 tax free |
First cy£50,000 tax free |
| Property:
Outside Cyprus: |
None |
None |
| Inheritance & gift tax | None (But you may be liable to UK tax) | None (But you may be liable to UK tax) |
| Rental income from outside Cyprus | No tax is due because this is normally taxed in the country where the property is situated | No tax is due because this is normally taxed in the country where the property is situated |
| Rental income from Cyprus. It is expected that you will be able to buy more than 1 property now Cyprus is an EU member. | Scale rates after scale deductions for repairs, 3% depreciation, not on the land cost, loan interest. In addition after deducting 25% of the gross rent, there is a 3% defence tax. | Scale rates after scale deductions for repairs, 3% depreciation, not on the land cost, loan interest. In addition after deducting 25% of the gross rent, there is a 3% defence tax. |
(The details above are advisory only, IT IS UP TO YOU TO CHECK YOUR OWN TAX POSITION)
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