VAT
Since 1/5/04 a statute in respect of VAT on properties has been introduced. Disposals of newly constructed properties for which a proper application for planning permit has been submitted with the relevant authorities after 1/5/04 are subject to VAT at standard rate.
Under certain conditions, a grant is given to entitled persons for the purchase of newly constructed properties that are used as the main permanent residence.
The application for the grant is submitted to the Ministry of Finance by any physical person citzen of the Republic of Cyprus or of any other EU member state who resides permanently in the Republic of Cyprus. The grant is for properties whose total covered area dose not exceed 250 m2 and is restricted to 130 m2. For more details you may contact a local accountant.
Tax Advantages
Cyprus is unique when it comes to the taxation aspects of living on the island.
The following income tax rates apply to individuals:
Chargeable income
(CYP) |
Tax Rate
(%) |
Accumulated tax
(CYP) |
| 0 – 10.000 |
- |
- |
| 10.001 – 15.000 |
20 |
1.000 |
| 15.001 – 20.000 |
25 |
2.250 |
| over 20.000 |
30 |
|
Retirees who become residents in Cyprus are taxed on their pensions from abroad at the rate of 5% per annum while an exception for the first £2.000 is granted.
Additionally, Cyprus has Double Taxation treaties with many European and other countries, safe-guarding its residents from paying tax in both countries. This gives the option to the citizens of those countries to take advantage of the very low rate in Cyprus
Double Taxation Agreements
Cyprus has double-taxation agreements with Austria, Bulgaria, Canada the People's Republic of China, the Czech Republic, Denmark, Egypt, France, Germany, Greece, Hungary, India, Ireland, Italy, Kuwait, Malta, Norway, Poland, Romania, Russia, (Armenia, Belarus, Kurdistan, Moldova, Tajikistan, Turkmenistan and Ukraine) Slovakia, South Africa, Sweden, Syria, the United Kingdom, the United States, Yugoslavia (Serbia and Montenegro) and other countries.
The main purpose of these treaties is the avoidance of double taxation of income earned in any of the above countries. A credit is usually allowed against the tax levied by the country of the tax payer's residence for taxes levied in the other country.
