Cyprus - Tax Guide for Freelance Contractors

Tax residents in Cyprus:          are liable to pay taxes in Cyprus on their worldwide income,
Non tax residents in Cyprus:   are liable to pay tax on Cyprus-source income only.

Individuals will be regarded as tax residents:

•  if they stay in Cyprus for a period or periods exceeding 183 days in a tax year.

Married persons are taxed separately.

Taxable income includes:

•  business profits,
•  income from an office or employment,
•  discounts,
•  pensions,
•  charges or annuities,
•  rents, royalties,
•  profits from property.

Certain deductions are permissible including:

•  expenses incurred for the production of income,
•  donations to approved charities,
•  social insurance fund contributions,
•  life insurance premiums,
•  pension plan contributions,
•  medical fund contributions.

Income tax rates for 2010:

•    0.00% on income up to EUR 19’500,
•  20.00% on income from EUR 19’501 up to EUR 28’000,
•  25.00% on income from EUR 28’001 up to EUR 36’300,
•  30.00% on the excess.

Special defence contribution

•    3.00% on dividends,
•  10.00% on interest payments not accrued from ordinary business activities, 
•  15.00% on gross rental payments.

Tax on employment income is withheld by the employer under the PAYE system and remitted to the tax authorities.

Filing date:

By 30th of April following the tax year.