Corporation Tax

 

Companies and semi-governmental organisations pay a tax rate of 12.5 %.

 

Exemptions:

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• Profit from the sale of securities; 

• Dividends;

• Interest not arising from the ordinary activities or closely related to the ordinary activities of the company, mainly bank deposit interest, however, such interest income is subject to Special Defence Contribution;

• Profits of a permanent establishment abroad, under certain conditions;

• Gains relating to foreign exchange differences with the exception of forex arising from trading in foreign currencies and related products.

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Immovable Property Tax

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Immovable property tax has been abolished as from 1 January 2017.

 

Social Insurance

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Employees and employers are subject to social insurance contributions at the rate of 8.3% and 10% respectively, on the employees’ gross employment income, subject to an annual income ceiling of just less than €55.000. 

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National Health System (ΓεΣΥ)

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As of 1 March 2019 obligatory contributions relating to the implementation of the new National Health System (ΓεΣΥ) have been imposed. The application for the contributions will be implemented in two phases. 

 

• Phase A applies from 1/3/2019 to 28/2/2020 and is set at the rate of 1.85% for employers and 1.7% for employees.

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• Phase B applies from 1/3/2020 onwards  and will be set at the rate of 2.9% for employers and 2.65% for employees. 

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Special Contribution for Defence (SDC)

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SDC is imposed on income earned by Cyprus tax residents.  This also applies to Cyprus tax resident companies. Individuals must be tax residents and domiciled in Cyprus in order for this to apply. Companies are charged 30% on other interest, and 3% on rental income which is reduced by 25%.