Specific Taxes in Cyprus

• Value-Added Tax (VAT): VAT is imposed on the supply of goods and services in Cyprus. Standard VAT rate is 19%, with reduced rates of 9% and 5% applicable to certain goods and services.
  • Revenue generated from VAT is used to fund government expenditures, including public services, infrastructure development, and social welfare programs.
• Property Tax: Property tax is levied on immovable property located in Cyprus. The tax is calculated based on the assessed value of the property and ranges from 0.6% to 1.9%.
  • Property tax serves as a source of revenue for local governments and contributes to the maintenance of public infrastructure and services.
• Capital Gains Tax: Capital gains tax is imposed on gains arising from the disposal of immovable property located in Cyprus or shares in companies holding immovable property. The tax rate is 20%.
  • Capital gains tax helps ensure fairness in the taxation of gains derived from the disposal of property and shares, contributing to the overall tax revenue.
• Stamp Duty: Stamp duty is applicable to various documents, including agreements, contracts, and transfers of property. Rates vary depending on the nature and value of the transaction.
  • Stamp duty generates revenue for the government and serves as a means of regulating and recording various transactions.
• Special Defence Contribution: Special Defence Contribution is imposed on dividends, interest, and rental income. The tax rates range from 0% to 17%, depending on the type of income and the residency status of the recipient.
  • Special Defence Contribution is partly used to fund the country's defense and security needs.

Taxpayers Subject to These Taxes:

• VAT: Businesses engaged in the supply of goods and services, including registered companies, sole proprietors, and partnerships.
• Property Tax: Property owners, including individuals, companies, and other legal entities.
• Capital Gains Tax: Individuals and companies disposing of immovable property or shares in property-holding companies.
• Stamp Duty: Parties involved in transactions subject to stamp duty, such as buyers, sellers, and parties to agreements.
• Special Defence Contribution: Individuals and companies earning dividends, interest, or rental income, including residents and non-residents.

Legal References:

• VAT Law (Law 95(I)/2000)
• Immovable Property Tax Law (Law 24/1980)
• Capital Gains Tax Law (Law 52/1980)
• Stamp Duty Law (Law 19/1963)
• Special Defence Contribution Law (Law 117(I)/2002)