Cyprus

Cyprus has very favourable tax rates particularly for the retired expatriate. Regardless of this it is very important to receive the correct Financial Advice regarding where to invest, where to receive the right advice for safety, as well as investment return.

Assessment Basis

Cypriot residents are taxed on their worldwide income.

Income Tax

Taxable income is taxed at progressive rates. The rates range from 20% to 35% on taxable income. As an austerity measure, a special contribution of between 2.5% and 3.5% is payable on gross earnings for the years 2012 and 2013 above 2,500 Euros.

Taxation of Investment Income

There is no tax payable on dividend and interest income sourced in Cyprus. Instead, every Cypriot resident pays a 'special defence contribution' on certain types of unearned income.

Tax on Property Rental Income

Income from rental property forms part of taxable income with a deduction for the first 20% of rental income. The remaining 80% is added to taxable income and taxed at the highest marginal rate. Rental income is also subject to the 'special defence contribution' at a rate of 3%.

Wealth Taxes

There are no wealth taxes in Cyprus.

Capital Gains Tax

Capital Gains Tax is imposed at the rate of 20% on gains from the disposal of immovable property situated in Cyprus, including gains from shares in companies that invest in immovable property.

Inheritance and Gift Tax

There is no Inheritance or Gift Tax in Cyprus.

Stamp Duty/Transfer Tax

There is a transfer tax payable. Progressive rates are applied to all transfers.

Sales Tax

The standard rate of VAT was increased from 15% to 17% in March 2012 and then increased to 18% on 14 January 2013. As from 13 January 2014 the standard VAT rate will increase again to 19%.

Professional, regulated advice should be sought in all circumstances.