Tax In Cyprus

A Contractor’s Guide to Taxes :

One of the most consistently challenging aspects of contracting in Cyprus is complying with the country’s tax system. As well as paying tax in Cyprus, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.

How do I calculate my taxable income:

If you’re working in Cyprus under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Cyprus for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Cyprus, but contractors may not be offered this service because of their short stay with each employer.

Anybody who can’t pay their tax in Cyprus through PAYE is left with the prospect of doing everything themselves.

Do you know much about Cypriot Tax Law? Does Cyprus have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Cyprus can range from 20 to 35 percent, and you need to be sure you are placed in the correct tax brackets.

Tax Calculator:

If you are a contractor and want a calculation on your tax and net retention in Cyprus, we can supply it to you free of charge.

Using an Umbrella Company for Income Tax :

Contractors in Cyprus are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Cypriot umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).

The companies are experts in Cypriot taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Cypriot tax office or tax department directly including processing your tax refund if you are eligible.

How We Can Help You with Tax:

We work with numerous umbrella companies in Cyprus, many of whom are experts in tax and immigration laws. If you have any questions about tax in Cyprus, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Cypriot work permit.

Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Cyprus but without the overhead of directly dealing with the Cypriot tax authorities. Get in touch with us today for some reliable advice on tax in Cyprus!

 

When Do You Need to Lodge Your Tax Return?:
Tax returns can be lodged once the tax year has ended. The tax year in Cyprus is the calendar year.
Tax Filing Deadline :
For the 2017 tax year, the deadline for filing returns is 31 October. An administrative penalty of €100 or €200 is imposed for the late submission of a tax return or late submission of supporting document requested by the Commissioner.
Can you file it online? :
Yes, https://taxisnet.mof.gov.cy/login.jsp
Currency:
Euros (EUR)
Tax-free Threshold in:
EUR 19,500
Grossed Income:
Up to 19,500
Tax Rate:
Exempt
Grossed Income:
19,501 to 28,000
Tax Rate:
20%
Grossed Income:
28,001 to 36,300
Tax Rate:
25%
Grossed Income:
36,301 to 60,000
Tax Rate:
30%
Grossed Income:
Above 60,001
Tax Rate:
35%
How long does it take to set up:
6 days
How much does it cost:
EUR 1,515
Is it easy? :
Starting a Business Rank: 50 https://www.doingbusiness.org/data/exploreeconomies/cyprus
How to File Taxes in:

As of 2018, income tax returns in Cyprus must be filed electronically. The process for filing income taxes in Cyprus involves:

Step 1: Register for the TaxisNet system here(link is external). You will be required to input your Taxpayer’s Identification Code (T.I.C) and Unique Registration Number. You will be issued an email to set up a PIN.

Step 2: Login to TaxisNet(link is external) using your T.I.C and PIN number.

Step 3: Enter the value for all sources of income. Income that is exempt from tax includes: dividends, interest, gains from the disposal of securities, rent from preserved buildings (subject to certain conditions) and lump sum from life insurance schemes.

Step 4: Enter any relevant deductions. Deductible expenses include donations, expenses for the letting of buildings, subscriptions to trade unions, investments in innovative small and medium sized business and others.

Step 5: Attach any supporting documents.

Step 6: Submit the tax return.

Step 7: If you have outstanding tax to be paid, this can be done electronically via their online JCC Smart Portal(link is external).  A fine of 5% on the tax due will apply for late payments.

Additional Information

Does the 183 day rule apply in:

Yes

When do you become a tax resident in:

An individual is resident in Cyprus if he or she is

  • Present in Cyprus for an aggregate of more than 183 days in any calendar year.
  • Is not a tax resident of another country
  • Maintains a permanent home in Cyprus that is either owned or rented.
Am I taxed on my global income in:

Residents are taxed on their worldwide profits or other benefits from a business, dividends, interest or discounts, pensions and any rental income. Non-residents are only taxed on their Cyprus sourced income. 

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