7 Highlights of Cyprus New Online Tax Returns for Expats

Cyprus Tax Residency - Online Returns Now Work

After a great period of intense work the Cyprus Tax authorities have achieved their objective of getting the 2017 system fully on line for all individual and business tax returns in cyprus for full year returns 2017 now due.

We still await details of new submission deadlines. Meanwhile ProACT Sam highlights Whats New for 2017 Cyprus Tax.

  1. All Cyprus Tax returns for individuals, business and trusts for 2017 Full returns onwards must be submitted on line.  this is a radical departure and update for the cyprus tax return system. 
  2. Cyprus tax residents do not pay tax on income under €19500 is free of income tax. Low earning partners and pensions could pay no income tax at all. Remember this is earned income in cyprus and not passive or other incomes.
  3. Over €60k income the cyprus income tax rate is the maximum 35%. A much higher rate but the maximum for Cyprus income Compare this to Germany with an average income tax rate of almost 50% of income..
  4. Expats pay 0% Tax on Savings Bank Inserts and Dividends. if you are tax residents but not from Cyprus then you could achieve massive income tax savings on bank interest and dividends.

Expats with large dividend income or income yielding investments can become tax resident of Cyprus and pay no tax on any of their investments. ProACT Tax Saving Expat Experts offer Free Reviews to assess your potential tax savings through Cyprus Tax Residency.

      5. All Overseas Pensions are taxed at a Flat rate of 5%. No matter whether your pension is 20k, 50K, 100k or 200k or more you always pay a flat rate of 5% as a Cyprus Tax resident.

Encashing a pension could be attractive to take funds out of an income tax environment. Conversely a Pension is a secure trust based arrangement that could save inheritance tax and probate administration on death.

A cyprus tax resident can enjoy low tax and secure pension funds.

      6. Expat Contractors and Business that relocate and adopt Cyprus tax residency, could get a 50% reduction in their top income tax rate for the first 10 years of tax residency. Not only has Cyprus a international low maximum tax rate, but this can also be reduced from 35% to 17.5% for 10 year.  Remember income tax is charge on income, for Expats there is 0% tax on any Dividend income.

Welcome to Cyprus.  If you are a contractor or earning high income and dividends from a business consider being a Cyprus tax resident for this income, and enjoy a maximum personal income tax rate of 17.5% pa for 10 years.

      7. New for 2017 is the 60 day rule.  Starting from January 2017 some ambiguity can now be removed for overseas contractors and business.  Normally tax residence is determined by living and working abroad in one country for more than 183 days in a year.

What about expats who are based in one country, and work abroad in a third contract.  on 1/2/3 month contracts. 

Under new exchange of information rules banks and tax offices can change income and demand confirmation of your tax residence.  For those that don’t have one they may want to legalise.

Cyprus new 60 day rule is ideal for expat business and contractors living and working abroad. Now to be a Cyprus tax resident, all you must be able to show is 60 days residence in Cyprus, and that you are not a tax resident elsewhere, or working in one country for more than 6 months a year, and,

all the benefits and tax breaks above apply. 0% tax on dividends and savings, a maximum income tax rate of 17.5% for the first 10 years.

To consider how Cyprus tax residency can help you living and working abroad , contact us for a free review and advice.

For help registering or making the new Cyprus online tax return