Verified Facts
Cyprus has a relatively low tax environment with a range of incentives for individuals and businesses, making it an attractive destination for expats and foreign investors.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
Cyprus has a territorial taxation system, where tax is levied on income earned within the country, as well as on income earned abroad, but only for tax residents. To be considered a tax resident in Cyprus, an individual must spend at least 183 days in the country within a calendar year, or have a permanent home in Cyprus and not be a tax resident in any other country. The tax system in Cyprus is designed to be straightforward and efficient, with a range of incentives and benefits for individuals and businesses.
The tax authorities in Cyprus, the Tax Department, are responsible for the administration of taxes, including income tax, corporate tax, and value-added tax (VAT). The Tax Department also provides guidance and support to taxpayers, including expats and foreign workers, to help them navigate the tax system and comply with their tax obligations. Cyprus has a network of double taxation treaties with 64 countries, which helps to prevent double taxation and fiscal evasion, and provides relief to taxpayers who are subject to tax in more than one country.
Personal Income Tax
| Income Bracket (EUR) | Tax Rate |
|---|---|
| 0 - 19,500 | 0% |
| 19,501 - 28,000 | 20% |
| 28,001 - 36,300 | 25% |
| 36,301 - 60,000 | 30% |
| 60,001 and above | 35% |
| Personal income tax in Cyprus is levied on an individual's taxable income, which includes employment income, self-employment income, and investment income. Taxpayers are entitled to various deductions and allowances, including a personal allowance, a spouse allowance, and a child allowance. Tax returns must be filed by July 31st of each year, and payment of any tax due must be made by the same date. Taxpayers who are required to file a tax return must also submit a self-assessment form, which includes a declaration of their taxable income and any tax due. |
Corporate & Business Tax
- The corporate tax rate in Cyprus is 12.5%, which is one of the lowest in the European Union.
- Small businesses with an annual turnover of less than EUR 700,000 may be eligible for a reduced corporate tax rate of 10%.
- Cyprus has a number of free zones, which offer a range of benefits, including exemption from VAT and customs duties, and a reduced corporate tax rate.
- Companies must register with the Registrar of Companies and obtain a tax identification number from the Tax Department in order to operate in Cyprus.
- Audit requirements apply to all companies in Cyprus, and companies must submit audited financial statements to the Tax Department on an annual basis.
VAT / Sales Tax
- The standard VAT rate in Cyprus is 19%, which applies to most goods and services.
- A reduced VAT rate of 9% applies to certain goods and services, including food, water, and pharmaceuticals.
- A zero VAT rate applies to exports of goods and services, as well as to certain financial services.
- Tourist refund schemes are available for non-EU residents who purchase goods in Cyprus and take them out of the country.
For Expats & Foreign Workers
- Tax residency rules apply to expats and foreign workers, who are considered tax residents in Cyprus if they spend at least 183 days in the country within a calendar year.
- Cyprus has a network of double taxation treaties with 64 countries, which helps to prevent double taxation and fiscal evasion.
- Expats and foreign workers may be eligible for a 60-day rule, which applies to individuals who work in Cyprus for a foreign employer and spend less than 60 days in the country within a calendar year.
- Social security contributions apply to expats and foreign workers, who must contribute to the Cypriot social security system if they are employed in Cyprus.
- Remittance rules apply to expats and foreign workers, who must declare any foreign income and pay tax on it in Cyprus if they are tax residents.
- Special tax regimes apply to certain categories of expats and foreign workers, including international business executives and foreign athletes.
Crypto & Investment Income
- Investment income, including dividends, interest, and rental income, is subject to income tax in Cyprus.
- Dividends received by Cypriot tax residents are exempt from tax, provided that the dividends are received from a Cypriot company or a company resident in a country with which Cyprus has a double taxation treaty.
- Cryptocurrency is subject to capital gains tax in Cyprus, which applies to gains made from the sale of cryptocurrency.
- Tax reporting requirements apply to individuals and companies that hold or trade cryptocurrency, who must declare any gains or losses on their tax return.