Personal Taxation

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Personal Taxation

Post  Twosox on Thu Apr 10, 2008 7:22 pm

A resident taxpayer is a person(s) who live in Cyprus for a total of more than 183 days per tax year. Personal taxation in Cyprus is calculated on all income from all sources whether in Cyprus or outside of Cyprus and is calculated on any world-wide income you may receive e.g. income from any paid employment including all welfare benefits, profits from a business, from renting your property and any royalties received and pensions you may be in receipt of. If you are in receipt of a pension outwith Cyprus it may be taxed at the reduced rate of 5% for any amount which exceeds 3430 equivalent.

Double Tax Treaties exist between the UK and Cyprus and you should ask for full details of any exemptions and reliefs.

Various deductions will be allowed e.g. in the case of shared ownership and where there are personal allowances. Couples who are married persons will be taxed separately.

All non-residents of Cyprus are taxed on any employment income including any welfare benefits, or where they provide a service in Cyprus, any profits from a permanent business(es) activity e.g rentals from immoveable property in Cyprus, any pensions in respect of employment in Cyprus, excluding a pension paid by the Government or Local Authority.

Any dividends payable to Cyprus residents are exempt from taxation and there will be no withholding tax on dividend payments to non-residents.

Chargeable income (after allowances) is taxed (2004) as follows:

up to 17144 - nil
from 17144 - 25716 - 20%
from 25716 - 34288 - 25%
above 34288 - 30%

Any foreign investment income is levied at 5% on amounts over 3430 per annum, provided the person is neither resident nor Cypriot or does not have economic activity on the island.

A 'Special Defence Contribution' may apply to certain kinds of unearned income as follows:

3% SDC on: interest received by provident funds, profits of semi-governmental organisations. Any rental income received by a Cyprus resident from immovable property (after a 25% deduction), Any interest received by a person with an annual income of 11960 or greater and any interest received by persons from any government bonds / government savings certificates.

10% SDC on: any interest received by a legal body and or by an individual both from Cyprus and/or from abroad.

15% SDC on: any dividends received by persons in Cyprus. Some other special systems operating for non-resident entertainers, sportspeople and experts.

Persons who have an office or employment in Cyprus, who live outside Cyprus before the start of their employment, will be granted a tax exemption of 20% of their income, or 8543, whichever is the lower, for a period of 3 years at the beginning of the year following the year of commencement of their employment.

Tax office location/directions
Location - offices are located on Neofytou Nikolaidi.

Directions - from Begonia Garden Centre, go right up Apostolou Pavlou Avenue to 3rd set of traffic lights. Turn right past the police station, take the 1st left. At traffic lights turn right and the offices are on the right hand side

Mrs Anastasia Lampou, 2nd floor, room 201

Information to take with you
Completed DT/Individual Form (must be completed before you go to the tax office), your ARC (Alien Residency Card, a P60 or your last pay slip from your employment in UK, pension information should be in receipt of a UK pension of any kind, your rental agreement (original preferred) or the contract for the purchase of any property and 2 stamp.

You will need to fill in three forms and should hear from the Tax Office within approximately three months

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