Consumption taxes

Nature of the tax

Valued Added Tax (VAT)

Tax rate

15%

Reduced tax rate

The 0% tax rate applies to exports and international transport. The 5% tax rate applies to gas, books, newspapers, food, medicine and the supply of new dwellings. The 8% tax rate applies to Hotel accommodation fees, Rural and private taxi transport services and tourist excursion and long distance bus services.
Rental of immovable property, financial services, insurance and postal services are exempted of VAT.

Other consumption taxes

Excise duties are charged on the import of certain products like fuel, vehicles, cigarettes and alcohol. The exhaustive list of the products, on which the excise duties are charged, can be seen on the web site of the Customs Office of Cyprus. An additional tax called "Temporary Refugee Levy" (TRL) is levied on some luxury products like whisky or cookies at a rate of 5 - 6%.

To get further information on VAT rates, please check the list of VAT rates applied within the European Union.
More detailed information on excise duties is available concerning alcoholic beverages, tobacco products, energy products on the European Commission website.

Corporate taxes

Tax rate

Capital gains taxation

Profits from the sale of securities are fully tax exempt. Capital gains tax at the rate of 20% is imposed on gains from the disposal of immovable property situated in Cyprus and on gains from the disposal of shares in an unlisted company that owns immovable property situated in Cyprus.

Main allowable deductions and tax credit

Interest income, dividend income, profit from the disposal of securities, profits from a permanent establishment maintained outside Cyprus are exempted from taxation.

Other corporate taxes

Real property tax, stamp duty, social security contributions, transfer fees, tax on banks (0.095% on deposits, excluding foreign deposits).

Individual taxes

Tax rate

Allowable deductions and tax credit

The most important personal deductions are donations to approved charities, contributions to the social insurance fund and similar contributions paid abroad; premiums for life insurance and contributions to pension plans and medical funds, rental income.

Special expatriate tax regime

A non-resident taking up employment and becoming resident of Cyprus will be given a 20% tax-fee allowance on employment income for the three years following the year of becoming resident of Cyprus.

Double taxation treaties

Countries with whom a double taxation treaty have been signed

See the list of double Taxation Conventions

Withholding taxes

Dividends: 0/15%, Interest: 0/10%, Royalties: 0/5%/10%

Bilateral agreement

Sources of fiscal information

Tax Authorities

Inland Revenue Department

Customs and Excise

Other domestic resources

Website providing interesting information on taxation and local advantages.
Consult Taxation trends in the European Union.