Tax Benefits for Expatriate Individuals
The Cyprus Tax regime offers some of the best personal tax advantages in the European Union for Cyprus non domicile tax residents.
Personal income tax rates
Taxable income up to €19,500 is effectively exempt from income tax. Taxable income exceeding this amount is subject to progressive income tax rates ranging from 20% to 35% for income exceeding €60,000.
No tax on dividend and interest income
A non-domiciled individual, irrespective of his/her tax residency status is exempt from tax on dividend and interest income. However, such income is subject to contributions to the GHCS at the rate of 2.65% from 1 March 2020
No tax on gains arising from the disposal of investments
Any gains arising from the disposal of shares, bonds and other similar financial instruments (including options and rights thereon) are exempt from tax. However, such income is subject to contributions to the GHCS at the rate of 2.65% from 1 March 2020
Exemptions regarding employment income
An expatriate individual relocating to Cyprus is eligible to the following income tax exemption on employment income:
50% of the remuneration from any employment exercised in Cyprus by an individual who was resident outside Cyprus before the commencement of his/her employment in Cyprus. The exemption applies for a period of ten years starting from the first year of employment provided that the employment income of the employee exceeds €100,000 per annum.
The 50% tax exemption would not be granted to an individual who has been a Cypriot tax resident for at least three out of the last five years immediately prior to the year of commencement of employment or to an individual who has been a Cypriot tax resident in the tax year immediately prior to the year of commencement of employment.
Income tax exemption for overseas employment
Remuneration from rendering services outside Cyprus to a non-resident employer or to an overseas permanent establishment of a resident employer for more than 90 days in a tax year is exempt from income tax.
Tax regime on foreign pension income
a Cypriot tax resident individual receiving pension income from services rendered abroad may choose to be taxed at a flat rate of 5%, on amounts exceeding €3.420 per annum.
Exemption from capital gains tax on sale of real estate
Gains arising from the disposal of real estate outside Cyprus are exempt from capital gains tax.
Estate duty, wealth tax, gift tax and inheritance tax
There is no estate duty, wealth tax, gift tax or inheritance tax in Cyprus.