Tax System in Cyprus
Resident of Cyprus:
Non Residents (individuals or companies), are being taxed only on their income acquired in Cyprus.
Cyprus offers a wide range of tax advantages to companies conducting business on the island. Such advantages derive from the country's favourable legislation compliant with OECD and EU requirements, as well as from the wide network of double taxation treaties with more than 60 countries involved.
Briefly, the main provisions of corporate taxation are:
Personal Income Tax
One of the lowest top statutory personal income tax rate, based on the Eurostat΄s data.
Individuals are subject to a scaled assessment rate on their annual income, starting with 20%, 25%,30%, and ending at 35%, with the first €19500 of income being non-taxable.
Below are briefly described some of the main provisions of Income Tax applied to individuals:
Income from the sources described below are NOT taxable under CERTAIN rules and conditions:
Cyprus international trusts enjoy important tax advantages, providing significant tax planning possibilities:
Value Added Tax
Liable to V.A.T. tax are those entities selling goods or providing services within the Republic of Cyprus, and those importing goods from other member states and Third countries.
V.A.T. rates are:
Visitors from non-EU countries can claim a refund of VAT paid on their purchases of goods in Cyprus upon their departure from the country, provided that the purchased goods are transported outside Cyprus (and the EU) in their personal luggage.