Personal Taxation Rates for Residents in Cyprus
The following tax rates apply to individuals deemed to be tax resident in Cyprus. Cyprus Income Tax Legislation defines a “resident in the Republic” as an individual who resides in Cyprus for 183 days or more in any given year.
Resident persons will be charged tax on any international income and tax is levied on all income arising from sources location both within and outside of Cyprus, including:
Personal Income Tax
The Income Tax rates for individuals in Cyprus are rated using a progressive method as seen from the table below.
Non-resident persons will be charged to tax on their income accruing or arising in respect of:
- Income from any trade, business, profession or vocation carried out or exercised as far as attributable to a permanent establishment in Cyprus.
- Profits or other benefits from any office or employment exercised in Cyprus.
- Any pension as a result from a past employment exercised in Cyprus with the exception of any pension paid out of funds created by the Government or a local authority.
- Rental income from property located within Cyprus.
Income, earned by a Cyprus tax resident individual, arising from the rental of immovable property which is situated in Cyprus is taxable both under the Income Tax (as per the above table) and the Special Contribution Tax legislation as follows:
Special Contribution Tax
As per the Special Contribution tax, 25% is deducted from the gross amount of rental income. After the deduction, the remaining amount is then subject to special tax rate of 3%.
Foreign pensions in respect of services rendered abroad are tax free for the first €3,420 and subsequently are taxed at a flat rate of 5%.
Cyprus levies no taxes on wealth.
Double Taxation Treaties (DTTs)
Double taxation treaties are made so individuals can avoid having to pay income tax in two countries. This gives the option to the citizen of the countries to take advantage of the low rate of tax in Cyprus.
Cyprus has longstanding Double Taxation Treaties with the following jurisdictions:
• United Kingdom.
• United States.
• Czech Republic.
• Russia (including most CIS countries: Armenia, Belarus, Kurdistan, Moldova, Tajikistan, Turkmenistan & Ukraine).
• South Africa.
With other countries still pending negotiation.