The submission of personal income tax returns (TD1 and TD1 self-employed) for the year 2022 is extended until October 2, 2023.
In Cyprus, the taxation of foreign individuals depends on their tax residency status. There are two main categories of tax residents in Cyprus:
Cyprus Tax Residents: Individuals who spend more than 183 days in Cyprus in a tax year are considered tax residents. They are subject to taxation on their worldwide income in Cyprus.
Non-Cyprus Tax Residents: Individuals who spend less than 183 days in Cyprus in a tax year are considered non-Cyprus tax residents. They are generally only subject to taxation on income earned in Cyprus.
Here are some key points to consider:
Tax Rates: Cyprus has a progressive tax system with several income tax bands, starting at 0% for income up to a certain threshold and increasing to higher rates for higher income levels. The rates were as follows:
0% for income up to €19,500
20% for income between €19,501 and €28,000
25% for income between €28,001 and €36,300
30% for income between €36,301 and €60,000
35% for income over €60,000
Exemptions and Deductions: Cyprus offers various exemptions and deductions that can reduce your taxable income. These may include tax credits for certain types of income, deductions for certain expenses, and exemptions for certain types of income, such as dividends and interest.
The following are some of the deducted from income:
• Contributions to trade unions or professional bodies (The whole amount)
• Loss of current year and previous years (The whole amount)
• Rental income 20% of gross rental income
• Donations to approved charities (The whole amount)
• Social Insurance, General Health System medical fund, private medical fund insurance contributions (maximum 1,5% of remuneration), pension and provident fund contributions (maximum 10% of remuneration) and life insurance premiums (maximum 7% of the insured amount)
Double Taxation Treaties: Cyprus has a network of double taxation treaties with many countries, which can help prevent double taxation on the same income in both Cyprus and your home country. These treaties often specify which country has the primary taxing rights on various types of income.
Non-Domiciled Status: Cyprus offers a non-domiciled (non-dom) regime, which can be advantageous for individuals who are not domiciled in Cyprus and do not have Cyprus as their permanent home. Under this regime, certain foreign income may be exempt from Cyprus taxation.
Capital Gains Tax: Cyprus also has a capital gains tax regime, which may apply to gains from the sale of immovable property in Cyprus or shares in companies that own such property.
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