The income tax rate in Cyprus varies from 0% to 35% depending on the amount of income earned.
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According to Cyprus tax laws, income tax is levied on anybody that earns an income over €19,500 per annum. The income tax rate in Cyprus varies from 0% to 35% depending on the amount of income earned. This means that if your income is lower than €19,500, you are not required to pay any income tax. Cyprus operates what is known as a ‘progressive’ tax system. This means that the more you earn, the higher the percentage of your total income you are required to pay in income tax.
“The hardest thing in the world to understand is income tax.” – Albert Einstein.
Some interesting facts about the Cyprus tax system include:
- Cyprus has one of the lowest corporate tax rates in Europe at 12.5%.
- The tax year in Cyprus runs from January 1st to December 31st.
- There is currently no inheritance tax in Cyprus.
- The taxation of non-domiciled individuals in Cyprus is one of the most attractive tax regimes in Europe.
- The Cypriot government offers a range of tax incentives to foreign businesses looking to set up shop in the country.
Here is a table showing the income tax rates in Cyprus for tax year 2021:
|Taxable income||Income tax rate|
|Up to €19,500||0%|
|€19,501 – €28,000||20%|
|€28,001 – €36,300||25%|
|€36,301 – €60,000||30%|
It’s important to note that these rates apply to individuals who are considered Cyprus tax residents. If you are unsure about your tax residency status, or any other tax-related matter in Cyprus, it’s always best to seek professional advice.
This video contains the answer to your query
The video “How to Legally Pay NO TAXES in Cyprus” explains how entrepreneurs can take advantage of Cyprus’s low tax rates, such as 12.5% corporate tax and 2.65% on capital gains. By paying low salaries and higher dividends tax-free, it is possible for entrepreneurs to legally pay no taxes in Cyprus. However, there are potential risks and regulations to consider when owning a business in Cyprus, and it is recommended to seek expert guidance before making any moves. The video ultimately suggests finding a country with reasonable tax schemes, developing a solid plan, and complying with all regulations to avoid issues in the future.
Some additional responses to your inquiry
How much is income tax in Cyprus? Cyprus-tax residents pay general and foreign taxes on their income worldwide at tax rates ranging from 20-35%. Companies pay a corporate income tax of 12.5%. There is a special regime for retirees: 5% of the pension payments if they exceed €3,420 per month.
All tax residents in Cyprus pay income tax on revenue earned in Cyprus and abroad, ranging from 0% to 35%. Non-residents pay income tax on certain types of income received in Cyprus. The tax-free income threshold for Cyprus residents is €19,500, and the tax rate increases for higher income brackets. The Tax Department of Cyprus is developing a new platform called Tax For All (TAF) to replace existing tax platforms, including TAXISnet. The new system will be implemented in stages, with the first stage dealing solely with Value Added Tax (VAT) and planned to be released in November 2022.
Income tax is paid by all tax residents on revenue earned in Cyprus and abroad. Non-residents pay income tax on certain types of income received in Cyprus. Income tax ranges from 0% to 35% and also applies to property rental income. A tax resident is any individual spending more than 183 days per year in the country (from 1 st
At present, Cyprus residents can earn up to €19,500 tax-free. The next €8,500 (between €19500 and €28,000) is taxed at 20%. Income between €28,000 and €36,300 is taxed at 25%, an income of €36,300 – 60,000 is taxed at 30%, and everything above €60,000 will give you a tax bill of 35%.
A new innovative platform -Tax For All- (TAF) is underway, by the Tax Department of Cyprus to replace TaxisNet, Tax Portal and other smaller systems. TAF will provide taxpayers and agents with real-time information and a more direct approach of their tax affairs. Agents can be appointed electronically through the TFA by the
Nicosia – The Cyprus Tax Department presented to members of the Cyprus VAT Association (CYVA) the new Tax For All (TFA) platform, earlier today. During a one-hour Zoom meeting, Anna Fantarou, Principal Assessor and External Communication Manager/Change Agent at the Central Offices of the Ministry of Finance and Nikolas
On 17/1/2023, the Cyprus Tax Department announced that the gradual implementation of the new Unified Tax Management System Tax For All (TFA) has already begun, which aims to gradually replace (among others) the TAXISnet platform and in the future other applications and systems. For the time being, the most important
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|Taxable Income Band (EUR)||National Income Tax Rates|
|0 to 19,500||0%|
|19,501 to 28,000||20%|
|28,001 to 36,300||25%|
|36,301 to 60,000||30%|
|Amount of income||Rate|
|Up to 19,500 €||0%|
|From 19,501 € to 28,000 €||20%|
|From 28,001 € to 36,300 €||25%|
|From 36,301 € to 60,000 €||30%|
Late payment of tax due to the Cyprus tax department, a penalty of 5% is imposed on the tax amount due to the Cyprus tax department. An additional penalty of 5% is imposed if the tax remains unpaid 2 months after the payment deadline.