How to Calculate and Pay Taxes in Cyprus

If you are moving abroad to Cyprus to retire or to live and work there then you will need to familiarize your self with their tax system and how you should calculate and pay your Cypriot income taxes. Regardless of how long you are in Cyprus, if you are receiving income of any kind then you will be required to pay taxes on that income. Depending on your resident status in Cyprus you may or may not be required to pay taxes on your worldwide income as opposed to only the income that you have earned in Cyprus.

In Cyprus the tax year runs from the first of January to the thirty-first of December. If you are classified as a non resident of Cyprus then you will only have to pay income tax in Cyprus on the income that you earned in Cyprus. If you are classified as a resident of Cyprus you will need to pay Cypriot income taxes on your worldwide income barring any double taxation agreements that are in place with other countries. You are classified as a resident for tax purposes if you spend more than 183 days in Cyprus during the tax year.

If you are an employee of a company in Cyprus then your tax contribution is automatically deducted from your pay. If you have no other sources of income to declare then you will not need to make an annual tax declaration in Cyprus. If you are working as a self employed professional in Cyprus or if you are the director of a limited company then you are expected to make three estimated tax payments. These tax payments have set due dates of August 1^st, September 30^th and December 31^st each year.

If you are a self employed professional then you also need to prepare an annual tax return that details your actual earned income. This must be submitted to the tax authorities before April 30^th of the following year. Once you submit that your actual liability is assessed and one of two things will happen. You will either receive a tax refund or you will be charged for the shortfall of not paying in enough.

For limited companies, all due taxes must be paid in full by August 1^st of the following year. If taxes are not paid by the due date then they are assessed an interest charge of five percent for the first six months that they payment is late. If the payment is more than six months late then the interest rate jumps up to nine percent.

There are four locations that take tax returns and where you make your payments. These offices are called Inland Revenue Offices and are located in Larnaca, Limassol, Nicosia and Paphos. You can take your tax returns there directly your self or your accountant, if you used one, can take it there for you. The main office of the Inland Revenue department is the Nicosia office and that is where you should direct any questions.