Tax Information - 2007

Personal Income Tax

Taxation of Individuals depends on their Resident status.

Tax Residents are liable to tax on their worldwide income. (Worldwide income earned within and outside Cyprus).
Non Tax Residents are liable to tax only on income earned within Cyprus.

Resident's definition

Cyprus residents are individuals who are residents for a period exceeding 183 days in a year of assessment. The computation of residence days 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.

Personal Tax Rates (Year 2006)
Taxable Income (C£)	Tax Rate (%)	Accumulated Tax (C£)
0 - 10.000	-	-
10.001 - 15.000	20	1000
15.001 - 20.000	25	2250
Over 20.001	30

Pensions Received From Abroad
Taxable Pensions (C£)	Tax Rate
Up to 2000	Nil
Over 2000	5%

Tax Exemptions

	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 personal injury	All
Capital sum received from insurance or approved provident funds	All
Profits from the disposal of securities	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 C£5000 annually. This exemption can be used for 3 years commencing from the 1st January following the first year of employment.	All
Remuneration from salaried services rendered outside Cyprus for more than 90 days in a tax year to a non-Cyprus resident employer or to a foreign permanent establishment of a Cyprus resident employer.	All
Deposits with Housing Finance Corporation (The exemption only applies to deposit schemes, which existed as at 30 April 2003)	40% of the amount deposited. The deposited amount cannot exceed 25% of a person's total income.

Tax deductions

The following are deducted from income:

Contributions to trade unions or professional bodies	All
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 charity foundations (with receipts)	All
Rental income	20% of gross rental income
Expenditure 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 C£200, C£300 and C£350 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 per cent of the insured amount)	The total amount of deduction is restricted to 1/6 of taxable income