Cyprus tax: An overview of the taxation system in Cyprus

Cyprus tax: An overview of the taxation system in Cyprus

 Cyprus Taxation Overview Cyprus offers an appealing taxation system with one of Europe's lowest corporate tax rates. As a member of the European Union, it upholds principles of fairness, justice, and the rule of law. Below is an overview of Cyprus' tax framework: General Framework:
  • Cyprus Income Tax Laws apply to individuals and companies.
  • Partnerships are taxed based on individual partners' income.
  • Cyprus tax year aligns with the calendar year.

Individuals Resident in Cyprus:
  • Residency determined by 183-day rule or 60-day rule.
  • Taxable income thresholds apply, with graduated personal income tax rates.

Corporate Income Tax (CIT):
  • Standard CIT rate is 12.5% of worldwide income.
  • Certain exceptions apply, such as dividends and securities profit.
  • Companies taxed if managed and controlled in Cyprus.

Rental Income Tax:
  • Residents taxed at rates ranging from 20% to 30% (individuals) and 12.5% (companies).
  • Special Contribution for Defense (SCD) applied at 3% on 80% of rental income.

Special Contribution for Defense (SCD):
  • Levied on income types like dividends, interest, and rental income.
  • Applicable to Cyprus tax residents and domiciled individuals and Cyprus tax resident companies.

Real Estate Taxes:
  • Real estate tax replaced by annual municipality tax.
  • Transfer fees depend on property value, with VAT applied on new properties.
  • Community (local authority) charge also applicable.

Value Added Tax (VAT):
  • Companies and self-employed with earnings exceeding €15,600 must register for VAT.
  • VAT payable electronically quarterly.

General Health System (GHS):
  • Employees, pensioners, and self-employed contribute to GHS.
  • Contributions based on income.

Payments of Tax:
  • Registration for income tax and VAT required.
  • Tax Identification Code (TIC) and VAT registration certificate issued.

Our Tax Services:
  • Companies:

  • Tax advice and compliance assistance.
  • Collaboration with Cyprus Tax Department.
  • Ensuring compliance with regulations and deadlines.

  • Individuals:

  • Preparation and submission of tax returns.
  • Guidance on various tax types and deadlines.

Navigating Cyprus' taxation landscape requires comprehensive understanding and meticulous compliance. Seek professional assistance for accurate guidance tailored to your needs.