It is also worth considering the personal income tax rates that apply in Cyprus. Depending on the income you earn while in the country, you can expect to pay between 20%, 35% over a specific threshold. Please consult the following breakdown:
- Income up to €19,500 – No tax payable
- Income up to €28,000 – 20% tax payable
- Income up to €36,300 – 25% tax payable
- Income up to €60,000 – 30% tax payable
- Income above €60,000 – 35% tax payable
There are some exemptions to the above tax listings. For example, those resident paying tax in Cyprus – but who do not live there – will not need to pay defence fees. Defence fees of 17% do apply to tax residents earning dividends. However, they do not need to pay the income tax rate on this money.
Interest, too, is applicable for the special defence fee, though it is exempt from income tax. Defence rates on part sit at 30%.
However, business owners and investors will need to consider whether or not interest is business profit. Should this be the case, the same rates as above will apply.
It is also worth considering pensions in relation to the above mentioned. Foreign pensions have an exempt allowance of €3,420 but then receive flat taxes of 5% after that. Cypriot pensions receive the same deductions.
There are a variety of deductions made from personal income in Cyprus. It is a good idea to consult a financial advisor for more information on what to expect. Contributions likely to emanate for most people include pension payments, social insurance and trade union membership fees.