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Generic Tax Name Personal income tax
Tax name in the national language Φόρος Εισοδήματος Φυσικού Προσώπου
Tax name in English Personal income tax
Member State CY-Cyprus
Tax in force since 1961/01/01
If abolished, date on which the tax ceases to apply
Business version date 2015/01/01
Version date 2015/02/17
This file was last updated on

Type of tax
Direct taxes Personal income tax
Corporate income tax
Other

Indirect taxes VAT
Excise duty (EU harmonised)
Alcoholic beverages
Energy products and electricity
Manufactured tobacco
Other

Social security contribution Employers
Employees
Other
 
Legal base

Law 118(I)/2002 as amended

 
Who sets
The tax rate is set by




The tax base is set by




The reliefs are set by




Comments
 
Beneficiary





Comments

 
Geographical Scope

The Republic of Cyprus.

 
Taxpayers
Domestic-source income of non-residents is Taxed
Not Taxed
Comments

Basis of assessment article 5(2) of above Law and for special types of income articles 21-23 of above Law.


Employment incomes of married couples are Taxed jointly
Taxed separately
Comments


Comments
 
Tax object and basis of assessment
As general rule, taxable income under personal income tax includes























Comments

Dividends ,Interests from government bonds, Interest from corporate bonds , Interest from special savings account , Interest from deposits are exempt from Income Tax but subject to SCD. Income from occasional activities falls within scope of above Law only if income arises from transactions that have the characteristics of trade. 


Income considered Domestic income
Worldwide income (subject to double-tax relief)
Comments

Benefits in kind
The following benefits in kind are usually (partially or fully) taxable












Comments

It reflects the practice of the Department.

As regards low interest loans these relate to non-trading loans granted by a company to individuals who are directors or shareholders or their spouces or their relatives up to second degree of kindred. The benefit is deemed 9% on the balance ( less actual interest charged )and is taxed through an amendment in the charging article, article 5 of Income Tax Law which is in effect as from 2012 



Comments
 
Deductions, Allowances, Credits, Exemptions
Deduction for professional expenses.
The deduction is:





Comments

Expenses considered wholly and exclusivelly in the production of the income.


Deductions from the tax base
The following items are usually (partially or fully) deductible

















Comments

All above expenses are deducted under certain conditions.

As regards taxes only social insurance , holiday ,redundancy and human development taxes are allowed as well as the special contribution to goverment by employees, pensioners and self employed which represents a scalar deduction on earned income .

Interest on loan and mortgages can be deducted by a self-employed ( non- employment income) under certain conditions.


Allowances
The basic yearly allowance for an individual amounts to:
The basic yearly allowance for a couple amounts to:
Additional allowance for 1st child
Additional allowance for 2nd child
Additional allowance for 3rd child
Additional allowance for additional child
Additional allowance for old age dependents
Comments

Credits
The basic yearly credit for an individual amounts to:
The basic yearly credit for a couple amounts to:
Additional credit for 1st child
Additional credit for 2nd child
Additional credit for 3rd child
Additional credit for additional child
Additional credit for old age dependents
There are tax credits for:

















Comments

Losses
Losses can be
Carried-forward for Indefinite
 Years
Carried-back for Indefinite
 Years
Transferred to spouse or partner
Comments

Losses relate to business losses and they can be carried forward if self employed obliged by Law to prepare audited accounts and that is if turnover is over 70,000 euro in a year.


Exemptions
The following income is exempted from income tax























Comments

Exempt or does not fall within scope of Law 118(I)/2002 as amended. Income from occasional activities falls within scope of above Law only if income arises from transactions that have the characteristics of trade..



Comments

The personal income up to €19,500 is tax free (as from 2008/01/01).

The amounts that are fully deducted from the personal income are listed below:

  • the contribution to the Social Security Fund,
  • the contribution to approved Provident Funds ( contribution up to 10%),
  • the contribution to private approved Life Insurance (subject to restrictions),contribution to approved pension fund ( contribution up to 10%), approved health  fund( contribution up to 1.5%), approved health insurance. All above contributions  ≤1/6 of Income net from deductions/exemptions

The special contribution to government by employees, pensioners and self employed.

the expenses incurred wholly and exclusively for the purposes of the production of the income.

 
Rate(s) Structure
The following personal income tax rates apply to aggregate annual income (allowances not included)
Bracket 1 From  0.00  EUR/Natcur
To  19,500.00  EUR/Natcur
Rate: 0.00 %
Bracket 2 From  19,501.00  EUR/Natcur
To  28,000.00  EUR/Natcur
Rate: 20.00 %
Bracket 3 From  28,001.00  EUR/Natcur
To  36,300.00  EUR/Natcur
Rate: 25.00 %
Bracket 4 From  36,300.00  EUR/Natcur
To  60,000.00  EUR/Natcur
Rate: 30.00 %
Bracket 5 From  60,001.00  EUR/Natcur
To   EUR/Natcur
Rate: 35.00 %
Comments

Regional taxes
Regional taxes are (rate in capital region) A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments

Local/municipal taxes
Local taxes are (rate in capital city) A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments

Special surcharges
There are special surcharges in the form of:
Surcharge 1 : Name:
A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments

Separate taxation
Separate taxation applies to the following items: Employment income
Income from business or self-employed activities
Income from sport and entertainment activities
Benefits in kind (company car, meal cheques, etc)
Pension income 5.0 %
Owner-occupied immovable property
Dividends
Interests from government bonds
Interests from corporate bonds
Interests from special saving accounts
Interests from deposits
Royalties
Income from renting immovable property
Income from renting movable property
Capital gains on immovable property
Capital gains on movable property
Inheritance
Annuities from life insurance
Prizes and awards
Scholarships
Income from occasional activities
Revenues from donations and gifts
Revenues from lotteries and games activities
Comments

Pension income for employment exercised outside Cyprus: 5% + Widow pension paid from Social Insurance or approved fund. Income from 0-19,500: 0% and from 19,501: 20%


Withholding taxes
The tax is withheld when paid to residents on: Dividends:
Final Creditable
Interests from governments bonds:
Final Creditable
Interests from corporate bonds:
Final Creditable
Interests from special saving accounts:
Final Creditable
Interests from deposits:
Final Creditable
Comments


Comments

Withholding taxes exist when above payments made to residents but under SCD Law.Withholding taxes are final.

Rate 1: SCD withholding tax on interest 30% except for goverment bonds 3%

Rate 2: SCD withholding tax on dividends 17%

 
Tax due date

Employees (Pay As You Earn - PAYE): Self assessment introduced for tax year 2014  onwards. Due payment within 2 months from due date of submission of tax return.

Self-Employed:  Temporary self assessment in year of assessment in 2 instalments 31/7 and 31/12. Any balance 1st August following year  if turnover exceeds 70,000 euro and if not 30/6 following year .

 
Tax collector

Tax Department

 
Special features

All self employed whose total turnover exceeds €70,000 are obliged to submit audited accounts, that have been prepared in accordance with acceptable accounting principles, to the department, and have been audited by an approved auditor as per company Law using acceptable auditing standards.

All individuals with income other than employment need to issue invoices and receipts as per regulations.

 
Economic function







Comments
 
Environmental taxes



Comments
 
Tax revenue
ESA95 code d51a

Year
Annual tax revenue (millions)
Currency
Tax revenue as % of GDP
Tax revenue as % of total tax revenue
2012 650.70 EUR 3.34
2011 671.40 EUR 3.44
2010 634.80 EUR 3.32
2009 593.90 EUR 3.21
2008 557.10 EUR 2.96
2007 510.50 EUR 2.92
2006 458.70 EUR 2.84
2005 420.50 EUR 2.81
2004 350.60 EUR 2.53
2003 448.00 EUR 3.50
2002 420.60 EUR 3.50
2001 373.00 EUR 3.23
2000 307.10 EUR 2.86

Comments