Last partial update, February 2025.

Cyprus Income Tax Rates

Cyprus Tax Overview (2025)

Individual Income Tax:

• Tax Rates: Cyprus's individual income tax rates are progressive.
  The specific tax brackets and rates should be verified with the tax authorities, as they have likely changed since 2024.
• Tax Residency: An individual is considered a tax resident if they spend more than 183 days in Cyprus in a calendar year or if their domicile is in Cyprus.
  The specific rules for determining domicile should be verified with the tax authorities.
• Taxation of Residents: Residents are taxed on their worldwide income.
• Taxation of Non-Residents: Non-residents are taxed only on Cyprus-source income.
• Salary Income: Employers are required to withhold income tax and social insurance contributions from employee salaries.
• Self-Employed Income: Self-employed individuals are required to make advance payments of income tax in installments.

Corporate Income Tax:

• Tax Rate: The standard corporate income tax rate should be verified with the tax authorities, as it may have changed.
  The 12.5% rate you mention is a common rate but may not be applicable in all cases.
• Shipping Companies: The tax treatment of shipping companies should be verified with the tax authorities, as the rules may have been updated.

Capital Gains:

• Individuals: Capital gains from the sale of immovable property in Cyprus or shares in unlisted companies that own such property are taxed.
  The specific rate should be verified with the tax authorities. Gains from the sale of listed shares are generally exempt.
  The rules and exemptions related to capital gains should be verified.
• Corporations: Gains from the disposal of immovable property in Cyprus and shares in unlisted companies owning such property are subject to corporate income tax.
  The specific rate should be verified with the tax authorities.
  Gains from the disposal of listed shares are generally exempt.
  The rules and exemptions related to capital gains should be verified.

Special Contribution for Defence (SCD):

• Applicability: Resident companies and individuals are subject to SCD on certain types of passive income, such as dividends, interest, and rental income.
• Rates: The specific SCD rates should be verified with the tax authorities, as they can change.
  
• Exemptions: Non-residents are generally exempt from SCD.

Reporting Dates and Payment:

• Tax Year: The tax year in Cyprus is the calendar year (ending December 31).
• Individual Income Tax: Tax returns are typically due by April 30th of the following year.
  Advance tax payments are required for self-employed individuals.
• Corporate Income Tax: Companies must file their tax returns by a specified date.
  Advance tax payments are also required.
  The specific deadlines should be verified with the tax authorities.
• Interest on Arrears: Interest is charged on overdue tax payments.
  The specific interest rate should be verified with the tax authorities.

Deduction of Tax at Source (Withholding Tax):

• Dividends: The withholding tax rate should be verified with the tax authorities.
• Royalties: The withholding tax rate should be verified with the tax authorities.
• Interest: The withholding tax rate should be verified with the tax authorities.
• Technical Services: The withholding tax rate should be verified with the tax authorities.

Social Insurance:

• Contributions: Both employers and employees are required to make social insurance contributions.
  Self-employed individuals also contribute.
  The specific rates and contribution bases should be verified with the Social Insurance Services.

Key Updates and Considerations:

• Tax Laws are Subject to Change: Cyprus tax laws and regulations are subject to frequent updates and amendments.
  It is crucial to verify the latest information with a qualified tax advisor or by consulting official Cyprus tax sources.
• Professional Advice: Tax regulations in Cyprus can be complex.
  It is highly recommended to seek professional advice from a tax specialist experienced in Cyprus tax law for specific guidance on your situation.