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Cyprus non-domicile regime taxation advantages

 

 

Cyprus Taxation incentives for High-net worth individuals moving to Cyprus – Illustrative examples

Cyprus is now encouraging High-net worth individuals to move to Cyprus by giving personal taxation incentives

1.      Exemption from Cyprus personal taxation of High-net worth individuals moving to Cyprus

The introduction of “Domicile” regime aims to exempt High-net worth non-domiciled individuals moving to Cyprus from personal taxes (Special Contribution for Defense). High-net worth non-domiciled individuals (non-doms) will need to declare Cyprus as their taxable jurisdiction and receive an exemption from Cyprus personal taxes (Special Contribution for Defense) on rents (3% on 75% on rent income), interest (30%) and dividends (17%) which are applicable to Cyprus domiciled individuals.The exemption will apply for 17 years as from the date of declaring Cyprus as their taxable jurisdiction.

2.      Income from Cyprus employment will be given a 50% tax exemption provided that annual remuneration exceeds €100.000.

Income from employment that exceeds €100.000 annually by any individual whose residence was outside Cyprus before the commencement of the employment in Cyprus will be given a 50% tax exemption. The exception is applicable for the first 10 years of employment. Considering personal taxation rates currently applicable in Cyprus, the effective taxation on € 100.000 remuneration is 6.2%.

Illustrative example 1 – A foreign individual commences employment in Cyprus. His income from employment is € 100.000 per annum

Taxable income

Tax

Tax

Accum

From

To

Rate

Tax

%

0

19,500

0

0

0

19,501

28,000

20

1,700

1,700

28,001

36,300

25

2,075

3,775

36,301

50,000

30

4,110

6,185

Foreign individual will be taxed € 6,185 or 6.2%

Illustrative example 2 – A foreign individual commences employment in Cyprus. His income from employment is € 150.000 per annum

Taxable income

Tax

Tax

Accum

From

To

Rate

Tax

%

0

19,500

0

0

0

19,501

28,000

20

1,700

1,700

28,001

36,300

25

2,075

3,775

36,301

60,000

30

7,110

10,885

60,001

75,000

35

5,250

16,135

The foreign individual will be taxed €16,135 or 16.1%

Conclusion

In summary, High-net worth individuals moving to Cyprus will be,

+ Exempt from personal taxes on interest income received in Cyprus

+ Exempt from personal taxes on dividend received in Cyprus

+ Taxed €6,185 or 6.2% on Income form employment in Cyprus of € 100.000

How can we help

+ We undertake all relevant arrangements for you to move to Cyprus

+ We can help you to make the relevant tax declarations in Cyprus and be taxed in Cyprus

Contact details

Tel +357 22 462727

Email: [email protected]

(Publication date: October 2015)

 

The authors expressly disclaim all and any liability and responsibility to any person, entity or corporation who acts or fails to act as a consequence of any reliance upon the whole or any part of the contents of this website.

Accordingly no person, entity or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining advice from an appropriately qualified professional person or firm of advisors, and ensuring that such advice specifically relates to their particular circumstances.

PKF / ATCO Limited is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms. This publication is for information purposes only and should not be considered as professional advice.

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