Brief summary of the Cyprus Tax system for individuals residing from abroad
A physical person’s liability to Cyprus tax is determined by their residence status for taxation purposes. The general rule applying for the tax basis of an individual is that where the individual is considered a tax resident in the Republic, tax is imposed on his/her income accruing or arising from sources all over the world (both within and outside the Republic). On the other hand, where the individual is not a tax resident in the Republic, tax is imposed on his/her income accruing or arising only from sources within the Republic.
Tax Basis
An individual is tax resident of Cyprus if he/she remains in the Republic for a period exceeding 183 days in a tax year.
With effect from 1 January 2017, an individual may also be considered tax resident in Cyprus if he/she satisfies the “60 days rule”. The “60 days rule” applies to individuals who in the relevant tax year:
and satisfy also the following three conditions:
All of the above conditions need to be satisfied in order for the individual to be considered as a Cyprus tax resident with the ‘’60 days rule’.
If the employment/business or holding of an office is terminated during the tax year, the individual will cease to be considered a Cyprus tax resident for that tax year under the ’60 days rule’ but may still be considered tax resident if the basic 183-day rule is satisfied.
For the purposes of both the “183 days rule” and the “60 days rule”, days in and out of Cyprus are calculated as follows:
The tax rates for individuals are the following:
Taxable income |
Tax rate |
Tax |
Cumulative amount of tax |
€ |
% |
€ |
€ |
0 – 19.500 |
- |
- |
- |
19.501 – 28.000 |
20 |
1.700 |
1.700 |
28.001 – 36.300 |
25 |
2.075 |
3.775 |
36.301 – 60.000 |
30 |
7.110 |
10.885 |
Over 60.000 |
35 |
Obligation to file tax return
There is no minimum number of days or minimum amount of income that exempts a person from the requirement to file an income tax return and pay tax in Cyprus, if any (special exemption for non-filing of tax return may only be granted by the Council of Ministers through a Decree).
Taxable period
In Cyprus, the tax year is the calendar year.
Types of taxable income
All earnings, whether paid in cash or in the form of a benefit-in-kind granted by the employer to the employee (i.e. rental benefit, private use of a motor vehicle, etc.), are taxable unless specifically exempted. Further, pensions, annuities, rental income, etc. are also taxable in Cyprus.
Compliance obligations
Individuals’ compliance obligations
All individuals should make a request to obtain a tax number from the Tax Department and then with their tax number should be registered online with the Taxisnet system to be able to submit their income tax returns. Income tax returns can only be submitted electronically. In this respect, the deadlines for the electronic submission of income tax returns are as follows:
Payment of taxes
Tax on employment income must be withheld by the employer, under the Pay-As-You-Earn (PAYE) system and remitted to the tax authorities monthly.
For employees and pensioners who are not obliged to prepare audited financial statements, a final balancing tax payment must be made by 31 July of the following year.
For self-employed individuals preparing audited financial statements (gross annual turnover equal €70.000 or more), a final balancing payment must be made by 1 August of the following year.
Globalserve Consultants Ltd can advice and assist you with your tax obligations in the Republic of Cyprus, you can contact us at Адрес электронной почты защищен от спам-ботов. Для просмотра адреса в вашем браузере должен быть включен Javascript. or call at 00357 25 817181
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