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Tax Rates for Individuals - Non-Dom Citizens

When an individual is a resident of the Republic of Cyprus, 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 a 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 31st 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 number 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

  • Any remuneration of foreign diplomats/ consular representatives who are not citizens of the Republic

  • The 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 special contribution will be withheld and paid in the same way as PAYE.

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


More information on Non-domiciled Cyprus tax residents

To be considered a tax resident of Cyprus, an individual must be 183 days or over in Cyprus during the calendar year (without any conditions), or 60 days during the calendar year according to the below conditions:

  • Do not reside in any other single state for a period exceeding 183 days in aggregate, and

  • Is not tax resident in any other state, and

  • Resides in Cyprus for at least 60 days, and

  • Fulfils the following conditions –

– Carry out any business in Cyprus and/or is employed in Cyprus and/or is a director of a company tax resident in Cyprus at any time in the tax year, provided that such is not terminated during the tax year.

– Maintain in the tax year a permanent residential property in Cyprus that is either owned or rented.

 

Advantages of being a non-domiciled Cyprus tax resident

Where an individual is non-domiciled in Cyprus but is a Cyprus tax resident, the following consequences arise:

  • no Cyprus tax is payable on receipt of dividend income from any company anywhere in the world (although on foreign dividends, the source country may withhold taxes);

  • no Cyprus tax is payable on receipt of interest income from anywhere in the world (although on foreign interest, the source country may withhold taxes);

  • no Defence tax is payable on rental income, however it taxable under personal tax (see below rates)

General Health System contributions at 2.65% will be payable on the above income (capped at €180.000).


For example:

Type of income –

  • dividend income €100.000- no defence tax, no personal tax

  • interest income from fixed deposits €30.000- no defence tax, no personal tax

  • interest income from bonds €20.000- no defence tax, taxed under personal tax at the following rates

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