Tax Rates for Individuals

Where an individual is resident in the Republic, tax is imposed on income accruing or arising from sources both within and outside the Republic.

Where an individual is not resident in the Republic, tax is imposed on income accruing or arising only from sources within the Republic.

An individual is considered to be resident if he is present in the Republic for a period exceeding 183 days in a tax year.

TAX RATES

Taxable Income € Tax Rate %
0-19,500 0
19,501 – 28,000 20
28,001 – 36,300 25
36,301 – 60,000 30
60,001 and over 35 (this rate is applicable as from the year 2011 onwards)

Tax is assessed on net income on a current year basis. The income tax year in Cyprus is the calendar year. For self employed individuals, an estimate of the tax due must be made by 31 July in the year of assessment and the estimated tax must be paid in two equal installments on the 31 July and 31 December. For employees Pay As You Earn (PAYE) income tax is deducted if applicable using the above rates on a monthly basis from his/her salary.

Special Contributions by Employees, Self-Employed and Pensioners of the private sector

For the years 2014 to 2016 all employees, self-employed persons or pensioners of the private sector shall pay a special contribution on their gross earnings as shown below.

  • Up to €1.500- no contribution
  • Between €1.501 and €2.500- 2.5% with a minimum contribution of €10
  • Between €2.501 and €3.500- 3%
  • €3.501 and over- 3.5%

There is no restriction/ maximum limit on the amount of earnings.

For employees, the above payment is shared equally by the employer and the employee.

The special contribution paid is deductible from the taxable income of the employee/ employer it relates to.

No contribution is payable on the below for private sector employees:

  • Retirement bonus
  • Payments from provident funds
  • Remuneration of foreigners employed by a foreign government or by an international organization
  • Remuneration of foreign diplomats/ consular representatives who are not citizens of the Republic
  • Remuneration of the crew of a Cypriot ship
  • Allowances paid cover business expenses for the account of the employer

Employees and pensioners who pay the Special Contribution under the Officers, Employees and Pensioners of the State and Public Sector Law on their salaries or pension are exempt from the above payment.

For employees and pensioners the amount of the special contribution will be withheld and paid in the same way as PAYE.

For self-employed individuals the amount of the special contribution will be paid on the basis of self-assessment.