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Cyprus Taxes

Compare to other EU jurisdictions and non-EU jurisdictions Cyprus taxes are extremely favorable. See examples of Cyprus taxes and examples of calculations in the table below.

NAME CURRENT BASE RATE NOTES EXAMPLE
Corporate income tax 12,50% Taxable profit = EURO 1 000.
Payable corporate tax = EURO 125 (1000*12.5%)
VAT (Value Added Tax) 19,00% 19% – base rate on the supply of goods or services;

9% – reduced rate is imposed on transport of passengers and their accompanying luggage within Cyprus, with urban, suburban and rural taxis as well as with tour and suburban buses, etc.

5% – reduced rate is imposed on the supply of coffins, services supplied by undertakers, services of writers, artists, on the supply of fertilizers, foodstuff for animal, live animals, seeds, non-bottled water, newspapers, books, etc.

Sale of services amounting to EURO 1 000. VAT to be added = EURO 190 (1000*19%).
Total amount to be paid by the customer=EURO 1 190.
Special contribution for defence on Dividends income 0,00% 0% – applicable to Legal Entities receiving dividend income from Cyprus resident companies.

0% – applicable to Legal Entities receiving dividend income from non-Cyprus resident companies.

20% – applicable to Individuals receiving dividend income from Cyprus resident companies.

20% – applicable to Individuals receiving dividend income from non-Cyprus resident companies.

Special contribution for defence on Interest income 15,00% 0% defence tax on interest received on loans given for companies, which main activity is investment (i.e. providing loans and receiving interest). However, it will be subject to corporate tax (12.5%).

15% defence tax on interest received is applicable to all other companies, which main income does not derive from Interest Income.

Capital gains tax 0,00% 0% Capital gains tax is imposed on the disposal of Immovable Property situated outside Cyprus, or shares of the companies in possession of such property.

20% Capital gains tax is imposed on the disposal of Immovable Property situated in Cyprus, or shares of the companies in possession of such property, excludiing shares of companies listed at any recognised Stock Exchange.

Withholding tax on royalties 0,00% 0% withholding tax applies to royalties paid to non-Cyprus resident.

10% withholdings tax applies to royalties paid to both Cyprus and non-Cyprus residents, provided such royalties were earned on rights used within Cyprus.

However, the rate is subject to the terms of the Double Taxation Treaties between the states.

Withholding tax on Dividends 0,00% 0% withholding tax applies to dividends paid to non-Cyprus resident.

However, the rate is subject to the terms of the Double Taxation Treaties between the states.

Withholding tax on Interest 0,00% 0% withholding tax applies to interest paid to non-Cyprus resident.

However, the rate is subject to the terms of the Double Taxation Treaties between the states.

Social Insurance payable by Employers 7,80% GROSS annual salary = EURO 12 000;
SI payable by the employer on monthly basis = EURO 78 ((12000*7.8%)/12 months).
Social Insurance payable by Employees 7,80% GROSS annual salary = EURO 12 000;
SI payable by the employee on monthly basis = EURO 78 ((12000*7.8%)/12 months).
Special Contribution payable by the Employer 1,25% 1.25% on monthly GROSS salaries over EURO 1 500;
1.5% on monthly GROSS salaries over EURO 2 500;
1.75% on monthly GROSS salaries over EURO 3 500;
2% on monthly GROSS salaries over EURO 4 500;
GROSS monthly salary = EURO 2 750;
Special Contribution payable by the employer = EURO 16.25 (((2500-1500)*1.25%)+((2750-2500)*1.5%)).
Special Contribution payable by the Employee 1,25% 1.25% on monthly GROSS salaries over EURO 1 500;
1.5% on monthly GROSS salaries over EURO 2 500;
1.75% on monthly GROSS salaries over EURO 3 500;
2% on monthly GROSS salaries over EURO 4 500;
GROSS monthly salary = EURO 2 750;
Special Contribution payable by the employee = EURO 16.25 (((2500-1500)*1.25%)+((2750-2500)*1.5%)).
Redundancy Fund payable by Employer 1,20% GROSS annual salary = EURO 12 000;
Redundancy Fund payable by the employer on monthly basis = EURO 12 ((12000*1.2%)/12 months).
Human Resources Fund payable by Employer 0,50% GROSS annual salary = EURO 12 000;
Human Resources Fund payable by the employer on monthly basis = EURO 5 ((12000*0.5%)/12 months).
Social Cohesion Fund payable by Employer 2,00% GROSS annual salary = EURO 12 000;
Social Cohesion Fund payable by the employer on monthly basis = EURO 20 ((12000*2.0%)/12 months).
PAYE tax 20% 0% PAYE tax is payable of annual salaries below EURO 19 500;

20% PAYE tax is payable of annual salaries between EURO 19 501 and 28 000;

25% PAYE tax is payable of annual salaries between EURO 28 001 and 36 300;

30% PAYE tax is payable of annual salaries between EURO 36 301 and 60 000;

35% PAYE tax is payable of annual salaries above EURO 60 001.

Annual salary NET of SI and other deductibles = EURO 19 000;
PAYE payable by the employee on monthly basis = ZERO.

Annual salary NET of SI and other deductibles = EURO 20 000;
PAYE payable by the employee on monthly basis = EURO 8.33 (((20 000-19 500)*20%)/12).

Annual salary NET of SI and other deductibles = EURO 30 000;
PAYE payable by the employee on monthly basis = EURO 183.33 (((28 000-19 500)*20%)+((30 000-28 000)*25%))/12).

Annual salary NET of SI and other deductibles = EURO 40 000;
PAYE payable by the employee on monthly basis = EURO 414.58 (((28 000-19 500)*20%)+((36 300-28 000)*25%)+((40 000-36 300)*30%)/12).

Annual salary NET of SI and other deductibles = EURO 70 000;
PAYE payable by the employee on monthly basis = EURO 1 198.75 (((28 000-19 500)*20%)+((36 300-28 000)*25%)+((60 000-36 300)*30%)+((70 000-60 000)*35%)/12).

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