Personal income tax

Resident and non-resident taxpayers shall be differentiated concerning the payment of personal income tax as well. In the case of PIT, a resident private individual means citizens residing in Cyprus for more than 183 days in the year. Accordingly, in Cyprus

• resident taxpayers are obliged to pay personal income tax on income originating from both foreign and Cyprian sources while
• foreign tax resident taxpayers are only required to pay income tax on gainful activities in Cyprus.

Which income is taxable for Cyprus residents?

• income from self-employment activities
• income from employment
• income from interest and dividends (see the taxation of income from interest and dividends)
• income from lease and royalty
• pension and annuity in Cyprus

Which income is taxable for non-resident individuals?

Taxable income of non-resident individuals in Cyprus is the following:

• income from permanent business presence in Cyprus
• pension if the place of employment was Cyprus
• income from the lease of Cyprian real estates
• management fee and other benefits in Cyprian companies
• pension after Cyprian employment

Tax rates

Personal income tax has multiple tax rates in Cyprus:

No personal income tax is payable by the private individuals on the following income:

• total amount of income from interest (except if it originates from regular business activity)
• total amount of dividends
• in the case of non resident taxpayers, salary for employment of more than 90 days (total amount)
• flat-rate sum received at retirement (total amount)
• 20% of income originating from leasing (BUT maximum EUR 8550)
• revenues originating from permanent foreign presence (total amount)
• income from the sales of financial futures

Furthermore, it is important to note that interest paid on rented real estates, donation to charities and costs of sustaining and maintaining premises – among others - may be deducted from the tax.