No taxation on emoluments earned abroad
TAX RATES FOR INDIVIDUALS
Employees are subject to income tax on the following tax rates:
| Taxable income | Tax rate | Amount of tax | Accumulated tax |
| € | % | € | € |
| 0- 22.000 | 0 | 0 | 0 |
| 22.001-32.000 | 20 | 2.000 | 2.000 |
| 32.001-42.000 | 25 | 2.500 | 4.500 |
| 42.001-72.000 | 30 | 9.000 | 13.500 |
| Over 72.001 | 35 |
For widows’ pensions which exceed the amount of €22.000, taxpayers may elect for these to be taxed at the rate of 20% or added to other sources of the individual’s income and taxed under the above Income Tax rates applicable for individuals.
Family income criteria
A number of deductions have been introduced based on family income criteria which are as follows:
| Family | Family Income thresholds (€) |
| No children | 100.000 |
| Up to 2 children (as of 31 Dec of tax year) | 100.000 |
| 3 or 4 children (as of 31 Dec of tax year) | 150.000 |
| 5 or more children (as of 31 Dec of tax year) | 200.000 |
| Single-parent families | Same family income thresholds as per number of children |
| Single persons | 40.000 |
| Deduction for each parent based on the above family income criteria. For single-parent families, and in the case of parents where one of the two parents has full custody, the amount of the deduction granted is doubled | €1.000 for the 1st child
€1.250 for the 2nd child €1.500 for the 3rd and any additional child |
| Interest expense paid in respect of a performing loan for the purchase or construction of a main residence situated in the Republic; or rent expense paid in respect of the use of a main residence situated in the Republic, based on the above family income criteria | Up to €2.000 for each spouse or common-law partner or single person |
| For total capital expenditure incurred to improve the energy efficiency of a main residence located in the Republic, based on the above family income criteria | Up to €1.000 for each spouse or common-law partner or single person |
| For total capital expenditure incurred for technical energy efficiency systems of the main residence, renewable energy systems, and electricity storage batteries, based on the above family income criteria | Up to €1.000 for each spouse or common-law partner or single person |
| For total capital expenditure incurred on electric vehicles registered with the Department of Road Transport, based on the above family income criteria | Up to €1.000 for each spouse or common-law partner or single person |
| Premiums paid to insure a residence against natural disasters. | Up to €500 |
| Employer’s contribution
€ |
Employee contribution
€ |
|
| Social Insurance | 8.8% | 8.8% |
| Self employed | – | 16.6% |
| Social Cohesion Fund | 2% | – |
| Redundancy Fund | 1.2% | – |
| Industrial Training Fund | 0.5% | – |
| Holiday Fund (if not exempt) | 8% | – |
Maximum insurable amount is EUR5.742 per month
National Health System Law
introduction of contribution effective from 1.3.2019
| Contributions | 2026 | |
| Employees/retirees/income earners | 2.65% | |
| Employers | 2.90% | |
| Self-employed | 4.00% | |
| The state | 4.70% | |
| Contributions are to be applied to a max level of taxable income (including dividends, interest & rental income) of €180,000 per annum. | ||
Deductions
|
20% of income |
|
|
| Area up to 120 m2 | €1.200 per m2 |
| Area up to 121 m2 – 1000 m2 | €1.100 per m2 |
| Area up to 1000 m2 | €700 per m2 |
|
|
Exemptions
Individuals |
Other persons |
|
| Lump sum payment on retirement or commutation of pension, or a gratuity on death | 100% | – |
| Capital sums from life insurance policies, provident funds, medical schemes or an approved pension | 100% | – |
| Income from a scholarship or another educational endowment | 100% | – |
| Income of any religious, charitable or educational institution of a public character | – | 100% |
| Income of any co-operative society in respect of transactions between its members | – | 100% |
| Emoluments of foreign officers of an institution exercising an educational, cultural or scientific function | 100% | – |
| Emoluments of foreign diplomatic and consular representatives if not citizens of Cyprus | 100% | – |
| Income of any local authority | – | 100% |
| Income of any approved pension scheme or provident fund or any insurance fund | – | 100% |
| Income of any company formed exclusively for the purpose of promoting art, science or sport | – | 100% |
| Pensions and special grants under special legislation | 100% | – |
| Foreign exchange gains (realized and/or unrealized), unless they result from trading in currencies and/or currency derivatives | 100% | 100% |
| Interest income | 100% | – |
| Dividend income is generally exempt from income tax unless the relevant dividend is allowed as a tax deduction in the jurisdiction of the dividend-paying company. | 100% | 100% |
| Article 8(21) – Remuneration from any employment exercised in Cyprus by an individual who was residing outside Cyprus before the commencement of their employment. This exemption applies for a period of five years commencing from 1 January of the year following commencement of employment (provided the employment started during or after 2012). Following amendment of article 8(21) this exemption applies only for employments which commenced up until 26.07.22. |
20% or €8.550 (lower of) |
– |
| Article 8(21A) – Remuneration from first employment exercised in the Republic of Cyprus, by a person who for a period of at least 3 consecutive years prior to the commencement of his employment in the Republic was employed outside the Republic by an employer not resident in the Republic.
This exemption is granted to a person whose first employment in the Republic commenced after 26.07.22 and up until the year 2027 inclusive. The exemption is granted for a period of 7 tax years following the year of employment in the Republic. |
20% or €8.550 (lower of) |
– |
| Article 8(21B) – Remuneration from any employment or profits from self-employment exercised in Cyprus by individuals who begin such activity in Cyprus between 2025 and 2030. This exemption may be claimed for the year of commencement and the following six tax years during which the individual is tax resident, provided annual income exceeds €30,000. The individual must not have been a Cyprus tax resident during the seven tax years immediately preceding the year of commencement but must have been a resident in at least one earlier year and must satisfy the required period of full-time employment outside Cyprus (36 months for university degree holders or 84 months). |
25% or €25.000 (lower of) |
– |
| Article 8(23) – Remuneration exceeding €100.000 per annum from any employment exercised in Cyprus by an individual who was a tax resident outside Cyprus prior to the commencement of employment. This exemption applies for the first 10 years of employment commencing as from 1 January 2012. The 50% exemption is not available to individuals whose employment commenced on or after 1 January 2015 if such individuals were:
• Tax residents of Cyprus for a period of 3 out of 5 years preceding the year of employment. • Tax residents of Cyprus in the year preceding the year of commencement of employment. Following amendment of article 8(23) this exemption applies only for employments which commenced up until 26.07.22. |
50% |
– |
| Amended Article 8(23A) – Remuneration from employment which is exercised in the Republic of Cyprus by a person who was resident outside the Republic for a period of at least fifteen consecutive years prior to the commencement of his first employment in the Republic.
The employment should have commenced after 1 January 2022 and the emoluments should exceed €55.000 during the first or second year following the date of commencement of the first employment in the Republic. The exemption is granted for a period of seventeen tax years or until the repeal of the relevant subsection of the ITL, whichever occurs earlier, commencing as of the year of commencement of first employment in the Republic. An individual whose employment commenced before 1 January 2022 and who was not Cyprus tax resident for a period of at least 15 consecutive years immediately before the commencement of his first employment in Cyprus, may also be eligible to claim the 50% exemption, during any tax year in which remuneration exceeds the amount of €55.000, starting from the tax year 2022 and until the completion of 17 consecutive tax years, or until the repeal of the relevant subsection of the ITL, whichever occurs earlier, beginning from the tax year in which the first employment commenced in the Republic of a person, who had continuous employment in the Republic from the year of commencement of his first employment up until the tax year 2021, provided he meets one of the following conditions: 1) The individual has benefited from the 50% exemption in accordance with the provisions of Article 8(23) of the Income Tax Law; or 2) The individual’s first employment in the Republic commenced during the years 2016 to 2021 with a remuneration exceeding €55.000 per year; or 3) The individual’s first employment in the Republic commenced during the years 2016 to 2021 with a remuneration that did not exceed €55.000 per annum and within a period of six months from 26.07.2022 the said remuneration exceeds the amount of €55.000 per annum. |
50% |
– |
| Profit from the sale of securities | 100% | 100% |
| Profits from a permanent establishment situated outside Cyprus, unless the permanent establishment directly or indirectly engages in more than 50% in activities that lead to investment income, and the foreign tax burden is substantially lower than the tax burden in Cyprus. The exemption does not apply in case where the foreign permanent establishment is situated in a jurisdiction that is included in the EU list (Annex I) of non-cooperative jurisdictions for tax purposes. |
100% |
100% |
| Remuneration for the rendering of salaried services outside Cyprus to an employer not resident in Cyprus or to a permanent establishment outside Cyprus of an employer resident in Cyprus, for a total aggregate period of more than 90 days in the year of assessment. |
100% |
– |