The income tax in Cyprus
The basis for taxation of individuals in Cyprus is the personal income tax, applicable on the income produced in the country. Certain types of income can be taxed at different rates and the personal income tax is imposed on all kinds of business profits, discounts, pensions,, rents, royalties, benefits in kind and others.
Taxation in Cyprus
is based on residence. Resident individuals are taxed on their worldwide income while non-residents are only taxed on their income produced in Cyprus. An individual is considered a resident of he or she spends more than 183 days in the country in one tax year.
The first 19,500 euros are tax-free and progressive rates apply for personal taxation up to a percentage of 35%. Personal deductions apply and they are possible through donations to approved charities, life insurance premiums, medical fund contributions or pension plan contributions.
Other taxes for individuals in Cyprus
Cyprus does not impose capital duty on individuals nor a capital acquisitions tax. Stamp duty and real property taxes do apply. Those who own a property in Cyprus must pay the annual tax imposed on the market value of the immovable property.
Social security contributions are payable both by the employer in Cyprus and the employee
. The individual must pay 7.8% of his/her salary and self-employed individuals must pay 14.6%.
Tax compliance for individuals in Cyprus
The tax year in Cyprus is the same as the calendar year. Administrative penalties apply for the late filing of the tax returns as well as late submission of information requested by tax authorities. An employer in Cyprus has to submit he tax return by April 30 following the tax year for his or her employees. Different deadlines for filing apply for self-employed individuals and those who must also submit audited accounts.