The Cyprus Tax regime offers some of the best personal tax advantages in the European Union for Cyprus non-domicile tax residents.
Personal income tax rates
Net income up to EUR 19,500 is exempt from income tax. Taxable income exceeding this amount is subject to progressive income tax rates ranging from 20% to 35% for income exceeding EUR 60,000.
No SDC on passive income
Non-domiciled individuals, irrespective of their tax residency status, are exempt from SDC on dividend, rent, and interest income. However, such income is subject to contributions to the GHS at the rate of 2.65%.
No tax on gains arising from the disposal of investments
Any gains arising from the disposal of shares, bonds, and other similar financial instruments (including options and rights) are exempt from income tax. However, such income is subject to contributions to the GHS at the rate of 2.65%.
Exemptions regarding employment income
An expatriate individual relocating to Cyprus is eligible for the following income tax exemption on employment income:
50% of the remuneration is given as tax relief from first employment exercised in the Republic by an individual who was resident outside the Republic before the commencement of employment for a minimum period of 10 years. The tax relief applies to employees with more than EUR 55,000 annual salary for 17 years starting from the first year of employment in the Republic.
20% of the remuneration (up to a maximum of EUR 8,550 per year) is given as tax relief from first employment exercised in the Republic, starting after July 26, 2022, by an individual who was resident and employed outside the Republic before the commencement of the employment for a minimum period of 3 years. The tax relief applies to employees with less than EUR 55,000 annual salary and for 7 years starting from the following year of commencing employment in the Republic.
Income tax exemption for overseas employment
Remuneration from the rendering of salaried services outside the Republic to a non-resident employer or a permanent establishment outside the Republic of a resident employer for an aggregate period in the year of assessment of more than 90 days
Tax regime on foreign pension income
A Cypriot tax resident individual receiving a pension from abroad may choose to be taxed at a flat rate of 5%, on amounts exceeding EUR 3,420 per annum.