+357 22 777802 admin@panaudit.eu

Income Tax – Individual

Individual resident in Cyprus are liable to income tax in accordance with the Income Tax Law (Law No. 118(I) of 2002 , as amended) in respect of their worldwide income. An individual is resident in Cyprus, if he/she resides therein for a period or more which in aggregate exceed 183 days. Non- tax residents are liable to tax in respect of Cyprus source income only. However, non-tax residents having a permanent establishment in Cyprus may elect, if it is to their benefit, to be taxed in accordance with the provisions applicable to tax residents. The income liable to income tax includes, inter alia, trade income, income from salaried services, pensions, interest, dividends, royalties, any amounts of trade goodwill, etc. The Law stipulates for various exemptions, provided certain conditions are satisfied.

The computation of residence in Cyprus is based on the following principles :

  • A day of departure from Cyprus is considered as a day outside the republic.
  • A day of arrival in Cyprus is considered as a day in the republic.

Tax Exemptions

Personal tax Rates (year 2008)

Taxable Income

Tax Rate

%

Tax on rate

Cumulative  Tax

0 – 19.500 Nil
19.501 – 28.000 20 1.700 1.700
28.001 – 36.300 25 2.075 3.775
36.301 – 60.000 30 7.110 10.885
60.001 and over 35    

 

Pensions Received from Abroad

Note : Regarding the pensions received from abroad, there is an option to choose to be taxed either at normal rates or at the special mode of taxation as above

Taxable Pensions

Tax Rates

%

Up to 3.417,20 Nil
Over 3.417,00 5

 

 

 

Limit of

Exemption

Interest Income All
Dividends Income All
Lump sum received in the form of bonus on retirement, on computation of pension, as a bonus on death or as compensation on death or pesonal injury All
Capital sum received from insurance or approved provident funds All
Widow pensions All
Individuals who were not Cypriot residents before the commencement of their employment are allowed after the first year an exemption of 20% of their emoluments with maximum amount  € 8.543,01 annually. This exemption can be used for 3 years commencing from 1st January following the first year of employment All
Deposits with Housing Finance Corporation (The Exemption applies to deposit schemes, which existed as at 30 April 2003) 40% of the amount deposited. The deposited amount connot exceed 25% of person’s total income

 

Tax Deductions

The Following are deducted from Income:

Contributions to trade unions or professional bodies

All

Loss of current year and previous years, but not loss incurred due to donations or contributions

All

Donations to approved foundations (with receipt)

All

Rental Income

20% of gross rental income

Expentiture incurred for the maintenance of listed buildings for which there has to be either a Preservation order or certificate by the Minister of Interior that the expenses are in respect of preservation work for restoring the building

Up to €700 – €1.100 and €1.200 per square meter (depending on the size of the building)

Social Insurance, provident fund, medical fund, pension fund contributions and life insurance premiums (the allowable annual life insurance premium is restricted to 7% of the insured amount)

The total amount of deduction is restricted to 1/5 of taxable income

 

Tax Rates for Income Tax from 1991

Individuals

%

Tax Years

1991-1995

£

1996-1999

£

2000-2001

£

2002

£

0

0 – 2 000

0 – 5 000

0 – 6 000

0 – 9 000

20

2 001 – 4 000

5 001 – 8 000

6 001 – 9 000

9 000 – 12 000

25

12 001 – 15 000

30

4 001 – 8 000

8 001 – 11 000

9 001 – 12 000

15 001 & Over

40

8 001 & over

11 001 & over

12001 & over

 

%

Tax Years

2003

£

2004 – 2006

£

2007

£

2008 / 2012

0

0 – 9 000

0 – 10 000

0 – 10 750

0 – 19 500

20

9 001 – 12 000

10 001 – 15 000

10 751 – 15 750

19 501 – 28 000

25

12 001 – 15 000

15 001 – 20 000

15 751 – 20 600

28 001 – 36 300

30

15 001 & Over

20 001 & Over

20 600 & over

36 301 – 60.000

35

60.001 and over

 

 

Tax Rates for Income Tax from 1991

£ 1991 –1995 1996 – 2002 2003 – 2004 2005 – 2007
0 – 40 000 20% (1,2) 20% (1,2) 10% (3,4) 10% (3,4,5)
40 000 – 100 000 25% (1,2)
100 001 – 1 000 000 25% (1,2)
1 000 001 and over 15% (5,6)

 

The information contained in this Site has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this newsletter. PanAudit Konnaris Limited would be pleased to advise readers on how to apply the principles set out in this newsletter to their specific circumstances. PanAudit Konnaris Limited accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this newsletter.

Our Mission Is to Build & Secure your Future

Panaudit

Future

Registered office:  25th March Str. no 19, 1st Floor, 2408 Engomi, Nicosia – Cyprus

Address: P.O. Box 25621, 1311 Nicosia – Cyprus
Telephone: +357 22 777802
Fax: +357 22 771469

Pavlos Demetriou

Audit & Assurance Manager
Mr. Pavlos Demetriou holds a bachelor of Science (BSc) in Accounting and Finance and he is a member of the Association of Chartered Certified Accountants (ACCA) and a member of ICPAC. He has extensive knowledge and experience of more than 10 years in Audit and Assurance.

pavlos.demetriou@panaudit.eu

Aristi Xenofontos

Human Resource Supervisor
Mrs Aristi Xenophontos has a Diploma in Office Administration and in LCCI Accounting and has extensive knowledge and experience of more than6years in Human Resource and Office Administration.

aristi.xenofontos@panaudit.eu

Demetra Kyprianou

Account Manager
Mrs. Demetra Kyprianou has a Bachelor Degree in Business Administration and Diploma in LCCI Accounting Third Level and has more than 10 years of experience in the areas of the firm’s activities.
demetra.kyprianou@panaudit.eu

Andri Andreou

Accounting and Tax Manager
Mrs Andri Andreou has a Diploma in Business Administration and in LCCI Accounting and has extensive knowledge and experience of more than 10 years in Accounting and Tax.

andri.andreou@panaudit.eu