Cyprus Personal Income Tax

An individual is considered to be tax resident in Cyprus for a given calendar year if he or she meets the criteria of the 183-day or 60-day rule.

183 day rule: The person stays in Cyprus for more than 183 days in one calendar year.

60 day rule: The person stays in Cyprus for at least 60 days in one calendar year and meets the following conditions:

• Is running a business in Cyprus (i.e. self-employed, employed or in a position in a company that is tax resident in Cyprus, e.g. director of a Cypriot company). If the activity (or employment, self-employment) is interrupted during the year, the person is not considered a tax resident of Cyprus for that year;

• Does not spend more than 183 days in any other country;

• Has a property-residence in Cyprus (it can be owned or rented);

• He is not a tax resident in any other country.

For the purpose of calculating days of presence in Cyprus:

• The day of arrival in Cyprus is counted as a day in Cyprus;

• The day of departure from Cyprus is counted as a day outside Cyprus;

• Arrival and departure from Cyprus on the same day is counted as a day in Cyprus;

• Departure and return to Cyprus on the same day is counted as a day outside Cyprus.

All Cyprus tax residents are taxed on their total income earned or derived from all local and foreign sources at the following rates:

Income tax exemptions:

• 20% of rental income; 

Income tax exemptions:

• Dividends;

• Interest (except interest arising from the ordinary business activities of an individual);

• Total capital resulting from payments to approved funds (e.g. pension funds);

• Profits from the sale of securities;

• Profits of foreign permanent establishments under certain conditions;

• Lump sums received as retirement benefits, pension conversions or compensation for death or personal injury.

Tax benefits:

• 50% exemption for remuneration from any employment performed in Cyprus by a person who was not a resident of Cyprus before the commencement of employment. The exemption is valid for 17 years for employment starting from 1 January 2022, provided that the annual remuneration exceeds €55,000.

• 20% of salary, with a maximum of €8,550 per annum, from any work performed in Cyprus by a person who was not a resident of Cyprus before starting the employment. For employments starting after 27 July 2022, this applies for 7 years, starting from the tax year following the year of commencement of employment. This exemption cannot be combined with the above 50% exemption from employment.

• The full amount is exempt for remuneration for services provided outside Cyprus for more than 90 days in a tax year for an employer who is not resident in Cyprus or for a foreign permanent establishment of a Cypriot employer.

• Tax-free repatriation of profits and capital;

• Exemption from capital gains tax on property other than real estate located in Cyprus;

• 50% reduction in transfer fees, while no transfer fees are charged if the property is subject to VAT;

• No real estate tax;

• No wealth tax;

• No inheritance tax;

• No gift tax.

Pension income from abroad

Foreign pension received in Cyprus is taxed either at a flat rate of 5% for amounts exceeding €3,420 per year or at the regular personal income tax rates.

Tax relief for foreign income

Through both the Double Tax Treaty (DTT) and the unilateral relief provided for in Cypriot tax law, residents with foreign income that have been subject to foreign tax are entitled to a tax relief equal to the lower of the foreign tax and the Cypriot tax imposed on that income.

Special Defense Component

The Special Defence Contribution is levied on dividend income, "passive" interest income and rental income earned by Cypriot tax residents and Cypriot tax residents domiciled in Cyprus.

Jest pobierana według stawek pokazanych w poniższej tabeli:

Non-domicile status for tax residents of Cyprus

According to Cypriot regulations on non-domicile status, please note the following definitions:

• Domicile is the place where someone has their permanent residence and where they intend to live permanently..

• Domicile of Origin is the place of birth (usually the same as the father's place of residence at the time of birth, in exceptional cases the mother's).

• Domicile of Choice is a place chosen by an adult as their permanent place of residence with the intention of living there permanently..

• A non-domicile is a person who lives in a country where he or she has no legal place of residence..

A non-domicile is a person who lives in a country where he or she has no legal place of residence.

For the purposes of SDC law, a person is registered in Cyprus if:

1. has his/her place of residence in Cyprus *(please note the exceptions below); or

2. has been a resident of Cyprus for at least 17 years out of the last 20 years prior to the tax year of assessment.

*Exceptions to point 1 above:

• a person who has acquired and maintains a place of residence of election outside Cyprus and has not been a tax resident of Cyprus under the Income Tax Law for a period of at least 20 consecutive years prior to the tax year of assessment; or

• a person who has not been a resident of Cyprus for at least 20 consecutive years immediately before the introduction of these regulations (i.e. before 16/07/2015).

See the table below for how the listed types of income are taxed for non-domicile Cypriots.:

Cyprus non-tax residents

Income earned or derived from sources in Cyprus is taxed in Cyprus in accordance with the above personal income tax rates, even though the individual is not a tax resident of Cyprus.

The Special Defense Contribution does not apply to non-tax residents of Cyprus.

Gesy (National Health System)

According to the National Health System Law of 2001 (89(I)/2001), as amended, the Republic implements a public health system that aims to provide the population with equal access to a comprehensive health care system. Patients can choose health care providers from both the private and public sectors.

Authorized persons

All citizens who have their normal place of residence in the controlled areas of the Republic, including:

• Citizens of Cyprus;

• Citizens of the European Union working or having the right of permanent residence in the Republic in accordance with national legislation;

• Third-country nationals who have legally acquired permanent residence in the Republic or equivalent rights under national law;

• Family members of the above categories in accordance with national regulations;

• Refugees and protected persons.

Contributions related to the introduction of the General Health System

*Applies to persons holding public offices or local offices or other offices whose income is not included in scope (I), (III), (IV) or (VII)

If the total sum of salary, pension income and other income exceeds €180,000, contributions to the General Health Scheme are only paid up to €180,000.