A Look at Income Tax Liability in Cyprus for Expats
Under the current laws only people that are classified as residents are required to pay income tax in Cyprus. People that are deemed to be non residents are only taxed on income that is earned in Cyprus. For tax purposes, you are classified as a resident of Cyprus if you spend more than 183 days in Cyprus in the tax year. The Cypriot tax year runs from January 1st to December 31st. If you do qualify as a resident you can expect for your worldwide income to be taxed in Cyprus. Cyprus does have double taxation agreements with a lot of countries to make sure your income is not taxed more than once.
However the 183 day rule goes out the window if your spouse and dependent children reside in Cyprus, have residence permits and you are not legally separated. In this instance you are considered to be a fiscal resident of Cyprus unless you have proof to the contrary. If you can be classified as a fiscal resident in two countries at the same time then your tax home will be decided under the rules applied under international treaties. Typically this means that you will end up being classified as a resident in the country that you have the greatest ties with economically.
If you plan on living in Cyprus on a permanent basis it is a good idea to notify your tax authorities in your home country. You may even be entitled to a bit of a tax refund from your home country! Typically you will have to provide the tax authorities with proof that you will no longer be living in that country. An employment contract in Cyprus should be sufficient proof.
If you are wondering if your home country is one that has a double taxation agreement with Cyprus you can check the following list. These countries have double taxation agreements with Cyprus: Austria, Belarus, Belgium, Bulgaria, Canada, China, the Czech Republic, Denmark, Egypt, France, Germany, Greece, Hungary, India, Ireland, Italy, Kuwait, Malta, Norway, Poland, Romania, Russia, Slovakia, South Africa, Sweden, Syria, the United Kingdom, the United States and Yugoslavia. If your country is not listed you may still want to check with your tax authorities as an agreement may have just been put in place!
Published by SL Newman
SL Newman has been working as a freelance writer since 1997. With experience in varied areas such as travel, immigration, finance and health, she has written for a variety of publications including USA Today... View profile
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