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Home -> Cyprus Income Tax - Double Taxation Treaties

Cyprus Income Tax - Double Taxation Treaties

Cyprus Income Tax 

By Andrew Sharpe

Cyprus income tax regulations benefit foreign property purchasers whose tax residency is in Cyprus, owing to the existence of double taxation relief agreements with many other countries (see list of countries below). Property purchasers who reside in Cyprus for more than 183 days are considered as tax residents in Cyprus and are liable to pay taxes on their worldwide income. Such income includes; employment income (including benefits), profits from a business activity, rentals from immoveable property and royalties, and pensions received (pensions from abroad may be taxed at the rate of 5% for amounts in excess of a designated amount, see below).

The Cyprus tax year, unlike the UK, ends on 31 December of each year. 

Low Tax Rates for the Retired (Pension Income)

Cyprus income tax for retired expatriates is very low with retirees having the option to be taxed in two different ways. The first €3,400 remitted is tax free and any additional remittances are taxed at a flat rate of 5%. Alternatively, you can choose the tax rate for individuals (see below) with the first €17,000 being tax free. If your income is less than €17,000, choose the tax rate for individuals. If your income is more than this amount, choose the 5% rate.

Pension income is charged at 5% on amounts over €3,400 pa provided that the individual is neither Cypriot, nor has economic activity on the island. To be eligible for the Retirees tax bands you must not undertake paid employment of any kind.

Cyprus Income tax rates for individuals are as follows:

Annual chargeable income (after all allowable deductions) is taxed (2008) as follows: 

  • €000 Zero   to    €19,500  - Tax Rate:  0%

  • £19,500      to   €28,000 -  Tax Rate: 20%

  • €28,001      to   €36,300 -  Tax Rate: 25%

  • €36,301 and over           -  Tax Rate: 30%

  • Residents are subject to defence contribution for passive income, e.g. rental, dividends etc. the rates are 3%-15%. 

  • Non residents are exempt from this tax.

For or all your indepedant Cyprus financial requirements including Cyprus income tax, please contact a professional:

Fraser Mackinlay (Middle East) in Cyprus who are professional independent financial consultants.

The following countries have double-taxation treaties with Cyprus (an * indicates that the treaty is awaiting ratification):

  • Armenia*

  • Austria

  • Belgium

  • Bulgaria

  • Canada

  • China

  • CIS (ex-USSR)

  • Czech Republic

  • Denmark

  • Egypt

  • Federal Rep. of Germany

  • Finland*

  • France

  • Greece

  • Hungary

  • India

  • Ireland

  • Italy

  • Japan*

  • Kuwait

  • Malta

  • Mauritius

  • Norway

  • Poland

  • Romania

  • Russia

  • Singapore*

  • Slovakia

  • South Africa*

  • Sweden

  • Syria

  • Thailand

  • Ukraine*

  • United Kingdom

  • United States

  • Yugoslavia (Serbia and Montenegro)

See Also: Cyprus Our Home | Cyprus Residence Permit | Cyprus Income Tax | Work Permit Cyprus | Emergency Numbers Cyprus | Doctors & Chemists Cyprus | Cyprus Hospitals | Cyprus Health Care | Cyprus Medical Insurance | Cyprus Medical Card | Common Ownership Law