Cyprus Income Tax

Income Tax for Private Individuals,
Resident & Non Resident Status

The tax system in Cyprus is progressive. This means that the higher ones income is, the higher the rate at which one will have to pay tax. In 2010 the tax rates for individuals still vary from 0% - 30% depending on the income value, residency and type of income.

A reduced tax rate and/or exemptions are granted for certain forms of income.

Residents are subject to defence contribution tax  for passive income (for example: rental income, dividends, interests, pensions arising from abroad, etc.). These rates are 3%-15% and are detailed later on this page under „Special Contribution for Defence Tax” title.

Non residents are exempt from this type of income tax.

An individual (resident or not) is always liable for tax on his income as an employee but also on income as a self-employed person.

As a Cyprus resident, tax will be payable on income earned in Cyprus and overseas. There is an exception however for salaries received overseas by individuals who meet the requirements to be permanent residents of Cyprus.

A foreign resident who is employed in Cyprus pays tax only on income earned in Cyprus.

To be considered a resident of Cyprus, residence of at least 183 days in Cyprus during any calendar tax year must be established or a life that is centered in Cyprus.
(For more information on residency issues view our cyprus residency page, including details on the special contribution for defence ).

An employer is obligated to deduct the amount of tax and national insurance due from a salaried worker each month.

A self-employed individual is obligated to make advanced payments on income tax that are offset upon filing the annual report. The advanced payments are made in three equal payments.

Certain payments are deductible from taxable income as detailed in the table below:

Tax %
Tax Base (EUR)
Tax (EUR)
Cumulative Tax (EUR)
Up to 19,500
36,301 and over


Special Contribution for Defence

All privates are obliged to pay taxes after income (ie. rental income, dividends received from their foreign companies) according to the regulations predefined by the country of their residency. In Cyprus this tax is called the Special Contribution for Defence.
Special contribution for Defence tax is due for tax resident idividuals. 

Special attention must be payed to international regulations such as the EU tax savings directives which enforce the trade of information between all european member states.

The following applies to Cyprus Residents on local and foreign income:

Type of Income
Individuals %
Tax Rates Companies %
Dividends from companies resident in Cyprus
Dividend from overseas companies
Nil or 15% (Note 1)
Interest derived in the normal course of business of the company (considered to be profit)
Interest received
10 (Note 2)
Profit of semi-governmental
Rent received (less 25%)
Interest from Government saving, Certificates, Government bonds, Approved provident funds
3% on the 1) interests received by provident funds, 2) the profits of semi-governmental bodies 3)rental income received by a Cyprus individual or corporate resident from immovable property (after deducting 25%) 4) interest received by an individual with a yearly income below EUR11,960 (at the time of writing) and 5) interest received by individuals from government bonds and government savings certificates.

10% on interests received by a legal entity  not related to an individuals normal business or by an individual with income over EUR11,960 pa.

15% on dividends received by individuals resident in Cyprus.

Dividend income from abroad is exempt from defence fund contribution provided that the company receiving the dividend owns directly at least 1% of the shares of the company paying the dividend. The exemption does not apply if:  1) the company paying the dividend engages directly or indirectly more than 50% of its activities that give rise to an investment income and 2) the foreign tax is under 5%

A 15% special contribution is payable when the exemption is not applicable.

Certain other special regimes operate for non-resident entertainers, sportspeople and experts.

Due dates for Submission of Cyprus income tax returns:

For individuals who do not submit accounts:

The due date for the the submission of the Cyprus income tax return for an employee is the 30th of April following the tax year to which the income tax relates. For individuals who do not submit accounts, but are self employed, the due date is the 30th of June following the tax year to which the income tax relates.

For individuals that submit accounts:

The submission of the Income Tax Return of a self employed individual having an obligation to submit accounts is the 31 of December, following the tax year to which the income tax return relates (as is the case of legal persons such as companies).

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