Cyprus personal tax regime is one of the most attractive in Europe. Professionals, entrepreneurs and salaried people consider Cyprus as their tax residence for the advantages of the local personal tax. The advantages and deductions offer incentives for relocation, and operation in Cyprus, or under employment for a local establishment. Cyprus is an EU member, operating under a secure legal and stable financial environment, protecting and attracting businesses and individuals. Although Cyprus is a well-known place for company formation due to attractive corporate tax, there are plenty benefits on the personal tax.
Cyprus tax residents (individuals) enjoy the benefits of the various levels of tax rating according to their income, with 0% tax on yearly income up to €19,500. In addition, tax deductions and benefits are given to individuals willing to move permanently to Cyprus.
An individual who spends more than 183 days in Cyprus in a calendar year is considered a Cyprus tax resident. Days in and out of the Cyprus Republic are calculated as follows:
- The day of departing out of Cyprus is considered a day out of the republic
- The day of arrival in Cyprus in considered a day within the republic
- Arriving and departing out of the Cyprus in the same day counts as one day of residence in Cyprus
- Departing and returning in Cyprus the same day counts as a day out of the republic
- Foreign taxes paid can be credited against the personal income tax liability
A Cyprus tax resident is taxed on all the collected income from sources within or out of Cyprus. A non-Cyprus resident is taxed on certain income collected from sources in Cyprus.
Income tax rates to individuals
0 – 19.500 = zero tax (0%)
19.501 – 28.000 = 1.700 (20%)
28.001 – 36.300 = 2.075 (25%)
36.301 – 60.000 = 7.110 (30%)
More than 60.000 = 35 %
Exemptions of income tax for individuals
Dividends = Whole amount exempted
Profits from the sale of securities = Whole amount
Profits of a foreign permanent establishment under certain conditions = Whole amount
Capital sum accruing to individuals from any payments to approved funds = Whole amount
Tax deductions on the income of individuals
Income from property rental = 20% of rental income