A Look at the Tax System in Cyprus
An important tax consideration involves property purchases in Cyprus. If you are buying a home abroad in Cyprus you will need to take into consideration the taxation that will be a result of that. The taxation you will experience when buying property in Cyprus is income tax, immovable property tax, capital gains tax, value added tax (VAT), and inheritance tax.
You will also want to take into consideration the income tax level in Cyprus. If you will be living in Cyprus on a permanent basis then you will be required to pay Cypriot income tax on your worldwide earnings. Cyprus does have double taxation agreements with a lot of countries to make sure your income is not taxed more than once. You will notice that the income tax rate in Cyprus is one of the lowest in Europe. You will also benefit from the lack of inheritance taxes, gift taxes and wealth taxes by being a resident of Cyprus.
Before becoming a member state of the European Union Cyprus was considered by many to be a sort of tax haven. A few decades ago Cyprus offered tax incentives to entice people which resulted in Cyprus being a financial center of Europe. However the people enjoying the favorable tax laws in Cyprus saw that come to and end as legislation began being introduce in 2003 that was aimed at regulating the tax laws in Cyprus so that they more closely resemble the other European Union countries.
Under current laws if any person that is a resident in Cyprus for more than 183 days per tax year is required to pay income tax in Cyprus. The Cypriot tax year runs from January 1st to December 31st. People that are deemed to be non residents are only taxed on income that is earned in Cyprus. Considering the low tax rates in Cyprus you may end up financially ahead by paying taxes in Cyprus as opposed to your home country. If you are unsure you should consult a local tax advisor.
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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Post a CommentHi Can you provide Cyprus domestic Income tax Law?