Cyprus has been a member state of the EU since 2004 and a member of the Eurozone since 2008
The accession of Cyprus to the European Union triggered a bold tax reform that aimed towards the alignment of the legislation with EU’s Acquis Communautaire and Code of Conduct of Business Taxation as well as the compliance with the requirements of the Organisation for Economic Co-operation and Development (OECD).
Main Tax advantages
Exemption from tax on dividend income
Income from dividends is exempt from tax regardless of its source. Exemption to the general rule is when:
Exemption from capital gains tax and income tax on the disposal of securities
No capital gains tax or income tax on the disposal of the shares of a Cyprus Company
No withholding taxes on payment of dividends and interest
Full adoption of the EU Directives beneficial to Cyprus companies
Cyprus intellectual property regime
Reduced withholding tax on dividends received from countries which Cyprus has concluded a double tax treaty
Capital gains and income tax exemption for real estate
Permanent establishment abroad
Unilateral foreign tax credit relief
Main Tax advantages
Cyprus offers considerable incentives for personal tax residency. Complementing the tax legislation are the island’s ideal geographical location, its EU membership, its robust legal system and reliable political environment.
With regard to personal taxes, Cyprus has one of the lowest top statutory personal income tax rates of 35% for net income exceeding €60.000 annually and no tax on net income of up to €19.500. At the same time, it also offers a number of very attractive personal tax incentives, through tax exemptions and deductions, in order to attract high net worth individuals of all ages.
Below is an analysis of the main provisions of Cyprus’ personal income tax regime as well as the key tax incentives provided to individuals who wish to relocate to Cyprus.
Exemptions on gains arising from the disposal of securities
No tax on wealth, gift, inheritance and endowment
Exemption from capital gains tax on sale of real estate
Income tax exemption for overseas employment
Substantial Tax Relief for non-residents taking up employment in Cyprus, during the first years of their employment:
Advantages available on pension income
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