Cyprus 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 (General Health Care System) 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 first employment income:

Exemptions regarding first employment

50% exemption of the remuneration from first employment exercised in Cyprus, by an individual who was resident outside Cyprus for at least ten consecutive years immediately before the commencement of his/her employment in Cyprus, provided that the remuneration from such employment exceeds €55.000.
The exemption applies for a period of 17 years, starting from the month of employment.
An individual is not considered to have a first employment in the following cases:

• at any time in the past he/she performed salaries services in Cyprus
• he/she terminates the first employment contract and enters into a new employment contract with another employer not belonging to the same group for accounting purposes
• he/she has a second or more employments with other employers that run parallel to the first employment (in which case the exemption will be granted only on the remuneration from the first 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 fiat 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.