The tax payment system in Cyprus is PAYE and it is automatically done by the employer’s payroll office. Taxes are deducted from your gross salary and paid by the employer every month.
For each calendar year in the year after every resident has to file a tax report to declare underpayment or apply for deductions.
Standard Personal Income Tax rates are the following:
| Chargeable income for the tax year (€) | Tax rate (%) | Accumulated tax (€) | |
|---|---|---|---|
| 0 | 19,500 | 0 | 0 |
| 19,501 | 28,000 | 20 | 1,700 |
| 28,001 | 36,300 | 25 | 3,775 |
| 36,301 | 60,000 | 30 | 10,885 |
| 60,001 | and above | 35 |
There are special exceptions and deductions for people working in international companies and not being domiciled in Cyprus (like ours for example), but since we are not a tax advising company, we would recommend that you check with our partner company C.X.Financia Ltd. who handles things like this.
Some examples:
- Foreign pension income is taxed at the flat rate of 5% on amounts over €3.420. The taxpayer can however on an annual basis elect to be taxed at the normal tax rates and bands set out above.
- Cyprus source widow(er)’s pension is taxed at the flat rate of 20% on amounts over €19.500. The taxpayer can however on an annual basis elect to be taxed at the normal tax rates and bands set out above.
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Interest, except for interest arising from ordinary business activities or closely related to the ordinary business activities of an individual is exempt.
Pages that will give you a rough estimate of your income tax are:
