Taxation is one of the many advantages of living in Cyprus. There is a high income tax threshold, special rates for foreign pensions and interest can be tax free for 17 years. There is no capital gains tax on shares and no local inheritance tax.
Are you living in Cyprus or thinking of moving there? We think you have made an excellent choice as there are so many benefits to living on the island. We could wax lyrical about the weather, way of life, friendly people, beaches and countryside, but since this is a finance column we should probably stick to that – as it happens, taxation is one of the advantages of moving to Cyprus.
As a resident of Cyprus, you are taxable on your worldwide income. Certain income, such as bank interest and dividends, is exempt from income tax but taxable in the form of ‘defence contributions’ (see below). Rental income is subject to both income tax and defence contributions.
Your first €19,500 of income is tax free. After that rates start at 20% and rise progressively to 35% for income over €60,000.
There is no capital gains tax in Cyprus on the sale of shares.
It is only payable on gains arising on the sale of real estate located in Cyprus (regardless of whether you are resident or not). So property in the UK or elsewhere is exempt. Where it is due, it is charged at the flat rate of 20%.
There is no capital gains tax on death, or on the transfer of assets between spouses or family members up to three times removed.
There is more good news when living in Cyprus – there is no inheritance or succession tax . Your assets can pass to your heirs without them having to pay any local tax.
Source: Blevin Franks