By 30 April 2017, salaried individuals that are tax resident in Cyprus and have a gross income exceeding €19.500 must submit their personal tax returns for the year 2016.
An individual is considered to be a tax resident in Cyprus if s/he spends more than 183 days in Cyprus in one calendar year.
The following income tax rates are applicable for individuals:
|Chargeable Income €||Tax Rate %||Accumulated Tax|
|0 – 19.500||0||0|
|19.501 – 28.000||20||1.700|
|28.001 – 36.300||25||3.775|
|36.301 – 60.000||30||10.885|
Note that the following are some of the items exempt from income tax:
- 100% of Interest Income (except if the interest arises from the ordinary or closely related to the ordinary business activities of an individual).
- 100% of Dividend Income.
- 100% of Profits from the sale of Securities.
- 100% of Capital payments from approved funds such as life insurance plans or provident funds.
- 100% of profits from a Foreign Permanent Establishment (under certain conditions).
- 100% of Remuneration from salaried services rendered outside Cyprus to a foreign employer or foreign permanent establishment for more than 90 days in one tax year.
- 100% of Cyprus widow’s pension. For amounts over €19,500, there is a taxable flat rate of 20%.
- 50% of the remuneration from employment in Cyprus by an individual who was not a resident of Cyprus before the commencement of the employment (this applies for 10 years for employments commencing as of 1 January 2012 given that the annual remuneration is greater than €100,000.
- 20% of the remuneration from employment exercise in Cyprus by an individual who was not a resident of Cyprus before the commencement of the employment.
- Foreign pensions are taxed at the flat rate of 5% on amounts over €3.420.
The following are some of the items deducted from income tax:
- 20% of gross Rental Income.
- 100% of donations / contributions to approved charities (with receipts).
- Amount invested in approved small and medium sized innovative enterprises (under certain conditions).
- 100% of loss made in current year and previous five years (if individuals prepare audited financial statements).
- 100% of contributions made to trade unions or professional bodies.
- 100% of special contributions of private sector employees, pensioners and self-employed.
- Social insurance contributions; annual life insurance premiums; provident fund contributions; pension fund contributions; medical fund contributions.
For any further information or for assistance in preparing your mandatory annual tax submissions please contact a member of our team who will be happy to assist you in any way.