Cyprus Tax Facts
The latest Cyprus Tax Facts guide provides a straight-forward, holistic summary of the Cyprus tax system, based on current legislation and tax practices, in relation to the fiscal year 2023.
Welcome to the 2023 Cyprus Tax Facts
We are delighted to introduce this year’s Cyprus Tax Facts. As a result of greatly accelerating the pace of new tax legislation, there is an increased risk that taxpayers will be caught unprepared, making a current, detailed guide on Cyprus’ Tax and Legal code all the more valuable.
Changes in 2022 included the introduction of Cyprus’ Recovery and Resilience Plan, Transfer Pricing rules in line with the OECD, new green taxes, a 120% R&D deduction for companies, updates to the 20% and 50% personal income tax exemptions and Double Taxation Agreements. Beyond 2022 we expect further changes and more clarity around the implementations of BEPS 2.0.
This Tax Guide represents hundreds of tax research hours, all of it done with our clients in mind, however, it should not be regarded as offering a complete explanation of the tax matters referred to and is subject to changes in the law and other applicable rules.
Readers are advised to consult our EY professionals for further information.
Resident of Cyprus (Individuals)
An individual who stays in Cyprus for a period or periods exceeding in aggregate 183 days in the year of assessment.
In addition, the definition of tax resident includes an individual who does not stay in any other state for one or more periods exceeding in aggregate 183 days in the same tax year and who is not considered a resident for tax purposes in any other state in the same tax year, provided that the individual cumulatively meets the following criteria:
- Stays in the Republic for at least 60 days in the year of assessment; and
- Exercises any business in the Republic and/or is employed in the Republic and/or holds an office for a person tax resident in the Republic at any time during the year of assessment; and
- Maintains a permanent residence in the Republic which is owned or rented by him.
Tax rates for individuals
Taxable income Tax rate Amount of Tax € 0 - 19,500 0 % € 0 € 19,501 - 28,000 20 % € 1,700 € 28,001 - 36,300 25 % € 2,075 € 36,301 - 60,000 30 % € 7,100 € Over 60,000 35 %
For widows’ pensions which exceed the amount of €19.500, taxpayers may elect for these to be taxed at the rate of 20% or added to other sources of the individual’s income and taxed under the above Income Tax rates applicable for individuals.
Domiciled in Cyprus
An individual is considered to be “domiciled in Cyprus” for Special Contribution to the Defence Fund purposes, if such an individual has a domicile of origin as this is defined in the Wills and Succession Law. Nevertheless, the following individuals are not considered to be domiciled in Cyprus:
- An individual who has obtained and maintained a domicile of choice outside Cyprus in accordance with the Wills and Succession Law, provided that such an individual has not been a tax resident of Cyprus for a period of 20 consecutive years preceding the tax year; or
- An individual who has not been a tax resident of Cyprus for a period of 20 consecutive years prior to 16 July 2015.
Notwithstanding the above, an individual who has been a tax resident of Cyprus for at least 17 years out of the 20 years prior to the tax year, will be considered to be “domiciled in Cyprus”.
Resident of Cyprus (Company)
A Company whose management and control is exercised in Cyprus. In addition, as of 31 December 2022, a company which is incorporated or registered in Cyprus, and its management and control is exercised outside Cyprus, should be considered resident for tax purposes of Cyprus unless it is a tax resident in another country.
Tax rate for companies
Corporate tax rate 12,5 %
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