Income Tax for Individuals in Cyprus
All Cyprus tax resident individuals are taxed on all chargeable income accrued or derived from all sources in Cyprus and abroad. Individuals who are not tax residents of Cyprus are taxed on certain income accrued or derived from sources in Cyprus.
An individual is tax resident in Cyprus if he spends in Cyprus more than 183 days in any one calendar year. Days in and out of Cyprus are calculated as follows:
-
the day of departure from Cyprus counts as a day of residence outside Cyprus
-
the day of arrival in Cyprus counts as a day of residence in Cyprus
-
arrival and departure from Cyprus in the same day counts as one day
of residence in Cyprus
-
departure and arrival in Cyprus in the same day counts as one day of
residence outside Cyprus
Foreign taxes paid can be credited against the personal income tax liability.
Personal tax rates
Foreign pension income is taxed at the flat rate of 5%. An annual exemption of €3.420 is granted. The taxpayer can however elect to be taxed at the normal tax rates and bands set out above. This is a choice which may be made year-on-year.