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Key tax dates in 2024

31 march

• Submission of 2022 corporation tax returns

• Submission of 2022 income tax returns for individuals with audited financial statements

• Deadline for the a reduction in social insurance payments

31 May

• Submission of 2023 payroll for employers to be submitted online.

30 june

• 1st instalment of SDC for 2024 on rental income in Cyprus & dividends & bank interest from outside Cyprus for the first 6 months of 2024.

31 July

• Payment & submission of 1st instalment of 2024 provisional tax

• 2023 personal tax return deadline to be submitted electronically.

1 August

• Payment of 2023 income tax for individuals with audited financial statements

• Payment of final corporation tax due for 2023 where self assessed.

31 december

• Payment & submission of 1st instalment of 2024 provisional tax

• 2nd instalment of SDC for 2024 on rental income in Cyprus & dividends & bank interest from outside Cyprus for the first 6 months of 2024.

Cyprus Tax Rates 2024

Income tax

Special Foreign pensions tax

There is a special foreigns pension tax for overseas pensions with a flat rate 5% tax applied to the pension income over €3,420.

This tax is optional, you either choose to have your overseas pensions taxed at this rate or the normal income tax rate (above), whichever results in the lower tax bill.

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%.

Special Defence Contribution

The Special Defence Contribution (SDC) is a tax on passive income (interest, dividends, and rental income), but only applicable to tax residents. Notably, non-domiciled residents are exempt from SDC on dividend and interest income, which can be particularly advantageous.

Rates

• Dividends: 17% (non-domiciled residents exempt)

• Interest: 17% (non-domiciled residents exempt)

• Rental income: 3% on 75% of the gross rent

Social Insurance Rates

Employee income thresholds

Self-employed income thresholds

The lower weekly limit for paying social insurance is occupation dependent while the upper weekly limit is €1,209. Contact us for advice.

Capital Gains Tax

Capital gains tax (CGT) is a form of taxation levied on the profit realized from the sale of non-inventory assets that were purchased at a cost amount that was lower than the amount realized upon the sale. In Cyprus, CGT is a key aspect of the country's tax system, impacting both residents and non-residents who engage in the sale of certain types of assets. This short article provides an overview of the capital gains tax in Cyprus, highlighting its key features, applicable rates, and exemptions.

Capital Gains Tax Rate in Cyprus

Thehe standard rate of capital gains tax in Cyprus is 20%. This rate applies to the profit gained from the disposal of certain types of property, including real estate located in Cyprus, shares in companies that own such real estate, and other assets specified by the law.

Assets Subject to CGT

The primary assets subject to capital gains tax in Cyprus are real estate properties. This includes both land and buildings situated in Cyprus. Additionally, shares in companies that own immovable property in Cyprus and are not listed on any recognized stock exchange are also subject to CGT.

Exemptions and Deductions

Several exemptions and deductions can reduce the capital gains tax liability in Cyprus. These include:

• Personal Residence Exemption: Profit from the sale of a personal residence may be exempt up to a certain limit, provided certain conditions are met.

• Years of Ownership: If the property was owned for a significant number of years, a portion of the gain may be exempt.

• Transfer by Inheritance: Inherited property may be exempt from CGT under specific circumstances.

• Improvements to Property: Expenses for the improvement of the property can be deducted from the taxable gain.

Calculation of CGT

To calculate the capital gains tax, the cost of acquisition of the asset, any expenditure made for improvements, and certain allowable deductions are subtracted from the sales price. The resulting profit is then subject to the 20% tax rate.

Foreign Investors

Foreign investors should be particularly aware of the CGT implications in Cyprus, especially when investing in real estate or shares in property-holding companies. It's essential for them to understand the tax treaties and regulations that might affect their tax liability.

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