read moreCyprus Incomes and Taxation
Resident taxpayers in Cyprus are taxed on all income acquired or derived from sources in Cyprus and abroad. A resident taxpayer is a person who lives in Cyprus for a total of more that 183 days in the tax year.
The tax rates for natural persons are:Taxable income Tax coefficient
- 0 - €17 086 0
- €17 087 – 25 629 20%
- €25 630 – 34 173 25%
- over €34 173 30%.
The calculation of taxable income takes account of deductible and discounted items such as subscriptions to trade unions and professional associations, donations to approved charities, Social Insurance Fund contributions, Pension Fund contributions, Relief Fund contributions and life insurance premiums, etc.
Spouses are taxed separately on the basis of separate annual income tax returns.
The income of a resident of the Republic from a pension in respect of services provided outside the Republic is subject to a tax rate of 5%, with exemption for the first €3 417 in each year. You are advised to contact the Inland Revenue Department (+357 22 601919) for the necessary details concerning your own case (the email address of the Inland Revenue Department is: svrasida@ird.mof.gov.cy).
The rates of VAT vary according to the type of product or service on the basis of the legislation. The following rates are applicable:
the zero rate (0%) food, medicines, etc.
the reduced rate (5%) books, newspapers, shoes, etc.
the reduced rate (8%) supply services, taxi fares, rural and tourist buses
the standard rate (15%).
The delivery of a house, apartment or business premise, etc. for which planning permission was applied for after 1/5/2004 is subject to VAT at 15%. Plots and land are exempt from VAT when sold without any form of building.
Text last edited on: 07/2011
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There may have been some important changes made to taxation in Cyprus since this article was updated. The latest updates may be viewed here Amendments To Cyprus Tax Laws
Source: www.cyprusexpat.co.uk