Tax Returns are now Compulsory for all Cyprus Tax Residents
In part 5 of our series "7 Tax Changes for Expats this Spring" we look at how tax returns are now compulsory for Cyprus tax residents.
Depending on the area(s) of interest which affect you most, catch up on our full series - the first article reviews Expat’s positions with regards to Negative Interest Rates in Europe. The second in our series considers new Capital Gains tax changes. The third article relates directly to Inheritance Tax as the fastest rising tax in the UK and its potential impacts for Expats and the fourth article in our series is a useful insight specific to Expats in Cyprus which relates to the new Health Tax for Cyprus residents. We hope you find the series useful.
Compulsory tax returns for Cyprus Residents
A big change for Cyprus tax payers is that every tax resident has to complete a tax return for 2019.
Effectively, a mandatory relationship has been introduced which is connected to health taxes. In the past, if you had no taxable income, you didn't need to do a tax return. You only needed to complete a tax return in Cyprus if you had taxable income.
Now everyone has to submit a tax return. Also, if you earned 10,000 euros on a small amount of work, from a small investment, a small rental, or from dividends, you may (in the past) not have paid any tax in Cyprus. Now you will be required to pay the Cyprus Health Tax pay for 2019 and 2020, unless it's paid at source.
People working in Cyprus are paying the health service tax at source, but from other dividend or investment income, that will be due.
So there's a big change. People will need to get registered to produce their online Cyprus tax returns and they need to work out and calculate what their tax is.
Exemptions for Cyprus Health Tax
There is a body of people that can get exemptions from a dividend tax to pay zero, from health tax to pay zero, and from a bank interest tax to pay zero. However, for this to happen, you have to have a certificate issued. This means that your tax registration needs to be up to date.
In Cyprus you will need the piece of paper for the tax exemption, in order to not pay tax with your 2019 return which will be due from the 1st of March. This will be new to many Expats, Living and Working Abroad in Cyprus.
For more information on registration and calculating your tax rates and how to pay, contact us at proactpartnership.com.
ProACT Know How
If you need help and assistance making your annual Cyprus tax return before the end of June, or registering your business for social insurance, contact us at www.proactpartnership.com/contact-us
Read more from the 7 Tax Changes for Expats this Spring series
DOWNLOAD OUR FREE BREXIT CHECKLIST FOR EXPATS
To keep in touch with the changes that will come into play during the Transition Period, ProACT Partnership has created a checklist for Expats to monitor. This provides a list of the 10 things Expats should follow during the Transition Period.