Personal income tax in Cyprus is calculated based on the following steps, based on the Income Tax Law (Law 118(I)/2002) and subsequent amendments:
- Determine the individual's total taxable income for the tax year.
- Apply the applicable tax rates to the taxable income to calculate the tax liability.
- Deduct any eligible tax credits or deductions to arrive at the final tax payable.]
Taxable income in Cyprus includes:
| Taxable Income (EUR) | Tax Rate (%) |
|---|---|
| Up to 19,500 | 0% |
| 19,501 - 28,000 | 20% |
| 28,001 - 36,300 | 25% |
| 36,301 - 60,000 | 30% |
| Over 60,000 | 35% |
- Employment income
- Rental income
- Interest income
- Dividend income
- Business profits
- Capital gains
- Pension income
- Foreign income for tax residents
Certain types of income are exempt from taxation in Cyprus, including:
- Dividends received from a Cyprus resident company (subject to conditions).
- Interest income (e.g., bank interest, government bonds).
- Profits from the sale of securities.
- Certain pension income.
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