Income Tax

OPTING TO PAY TAX IN CYPRUS

Generally speaking, income tax, and how it is applied in Cyprus, falls into two categories

Taxation for Residents

After living or staying here for 183 days or more, an individual is considered to be resident in Cyprus. Income tax then becomes payable in respect to the following local and global sources:

a) Income from a business or employment
b) Business profits
c) Rents from property owned
d) Interest
e) Any consideration with regards to trading goodwill

Income Tax Rates

Income between €00,000 to €19,500 is tax-free
Income between €19,501 to €28,000 is taxed at a rate of 20%
Income between €28,001 to €36,300 is taxed at a rate of 25%
Income of €36,301 and over is taxable at a rate of  30%

For Non-Residents of Cyprus

Income Tax is payable on revenues derived only from the Cypriot sources listed below. Such income is then taxable under existing dual taxation treaties with the non-resident's home nation.

a) Profits from a permanently established business
b) Income from employment
c) Rents from property
d) Any consideration with respect to trading goodwill
e) Professional income (Self-Employment)

Main Tax Allowances

As in other European Union countries, tax-relief is available on certain expenses and contributions. Some of these are:

  • Social Insurance contributions
  • Life Insurance premiums
  • Provident Fund or other approved fund contribution
  • Trade Union contributions
  • Contributions to professional bodies
  • Charitable contributions without any upper limit

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