Expatriate tax ebook - Cyprus

What taxes?

Capital gains tax
Inheritance, estate and gift taxes
Investment income
Local taxes
Real estate taxes
Social security taxes
Stock options
Wealth taxes
Other specific taxes

Capital gains tax
Both Companies and individuals are subject to capital gains tax, at the rate of 20%, on gains arising from the disposal of:

immovable property situated in Cyprus
shares in a company which owns immovable property situated in Cyprus (excluding shares listed on any recognised stock exchange)

Inheritance, estate & gift taxes
Estate Duty has been abolished for deaths on or after 1 January 2000.

However, the legal representative of a deceased person is required to submit to the Inland Revenue a statement of assets and liabilities within six months from the date of death. All outstanding tax obligations have to be settled before the estate of the deceased can be distributed to the beneficiaries.

Investment income
Investment income is subject to Special Defence Contribution at the rates indicated below. It should be noted that this legislation applies only to Cyprus tax residents.

Type of income	Rate %
Interest income of resident individuals from sources within the Republic of Cyprus	10
Interest income of resident individuals from sources outside the Republic of Cyprus	10
Interest income of resident individuals from Cyprus Government development bonds and savings certificates	3
Rental income of resident individuals (reduced by 25%)	3
Dividend income of Cyprus tax resident individuals	15

Note

Foreign tax paid can be credited against special defence contribution payable.

Local taxes
Covered in previous sections

Real estate tax
Immovable property tax is levied on properties that are situated in Cyprus based on their estimated values as at 1/1/1980.

The tax bands are as follows:

Value of property €	Tax rate – per thousand	Tax €
0 – 170.860	0	0
170.860 – 427.150	2,5	640,73
427.150 – 854.300	3,5	1495,03
854.300 +	4

Social security taxes

Social Insurance Contributions
Employer’s contribution	6.8%	Maximum earnings on which contributions are payable: €1,002 per week €4.342 per month or 52,104 monthly employees per annum

Employee’s contribution

Self-employed individual	12.6%	Based on a minimum income specified for the various professions and vocations

Other Contributions by employer
Social cohesion fund	2%	contributions to social cohesion fund are not restricted to above maximum earnings
Redundancy fund	1.2%
Industrial training fund	0.5%
Holiday fund	8%	unless exempt if other acceptable arrangements exist

Stock options
The value of such a benefit in kind is taxable under income tax.

Wealth tax
Not applicable

Other specific taxes
Not applicable

Information about Cyprus:

Last updated 14 June 2011

Please be aware that the data included in this expatriate tax e-book is correct at the time of publication. Please do not act on the information contained within this e-book without first seeking expert, professional advice.
Disclaimer

Contact us

For further information on expatriate tax services in Cyprus please contact George Karavis.

Related websites

Cyprus Inland Revenue Website

Related publications

Cyprus Tax Facts 2011

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