Key Dates

• 31 July 2021 - 1st instalment of 2021 temporary tax due between 1 - 31 July

• 30 November 2021 - Final 2020 tax return due (extended)

• 31 December 2021 - 2nd installment of 2021 temporary tax due between 1 - 31 December

Cyprus income tax rates 2021

Foreign pensions have an optional special tax rate of 5% on amounts over €3,420. 

Should I pay the normal tax rate or special rate on my foreign pensions?

You can choose whether to pay the standard tax rate on your foreign pension(s), or the special tax rate. This is not an additional tax.

Your choice will depend on whichever option results in less tax.

Example 1

John has a UK state pension of €10,000 and a private UK pension of €5,000 per annum for a total income of €15,000.

John would chose to declare his pensions under the normal income tax rates as hit total income is below €19,500, of which all income is tax free.

Example 2

Jennifer has a UK state pension of €10,000 and a UK private pension of €20,000 for a total income of €30,000 per annum.

If she were to declare her income under the normal tax rate then her tax bill would be as follows:

If however she elected to have her foreign pensions taxed under the special foreign pensions tax rate of 5% her tax will would be as follows:

Jennifer would therefore elect to have her foreign pensions taxed under the special rate of 5%.