Income Tax Rates

Foreign pensions and property income are taxed at different rates.

Deductions

Before you’re liable for income tax, you can subtract certain deductions from your gross income, including the following:

• Contributions or premiums paid to widows’ and orphans’ pension funds or schemes;

• Donations to approved charitable funds;

• Membership fees for trade and professional organisations, if membership is mandatory;

• 40 per cent of amounts deposited with a Housing Finance Corporation;

• 20 per cent of any rental income from property in Cyprus;

• Interest on a loan taken out to purchase or improve a rental property.

• Depreciation on a rental property (3 per cent deduction);

• Social security contributions, provident fund, medical fund and pension fund contributions and life insurance contributions (the deduction is one-sixth of the chargeable income on all these payments);

• Expenditure incurred for the maintenance of a listed building where a Preservation Order applies (the deduction depends on the square footage of the building).

In order to claim deductions relating to personal expenditure or family circumstances, it’s usually necessary to produce receipts.

Cash Grants

Under the 2003 tax reforms, tax allowances were either abolished or replaced by cash grants, as follows:

Child Grant – All families resident in Cyprus which have a gross family income below the threshold are entitled to a basic child grant and a supplementary grant.

Higher Education Grant – €2,563 per annum for each child receiving full-time higher education in Cyprus or at a foreign university;

Blind Grant – €3,417 per annum for blind people.

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Also in this section

• Banks: Where to manage your finances
• Accounts: How to open a bank account in Cyprus
• Cash, Cheques & Credit Cards: How to use them
• Cost of Living: What is the cost of living in Cyprus?
• Importing & Exporting Money: How to receive and transfer money
• Taxes in Cyprus: An introduction to Cyprus' tax system
• Income Tax Liability: Who is liable to pay income tax?
• Taxable Income: What part of my income is taxable?
• Taxation of Foreign Pensions: How will your pension be taxed in Cyprus?
• Taxation of Property Income: How much is tax on property income?
• Income Tax Rates: Calculating your income tax
• Calculation & Tax Return: Filing and payment
• Immovable Property Tax: Who needs to pay it?
• Capital Gains Tax: Who needs to pay it?
• Value Added Tax: Rates & Exemptions