Local Taxation & Pensions

Income Tax:
Cyprus has one of the lowest Income Tax Rate structures in the E.E.C Rates commence at 20% to a maximum of 30%. In Spain rates are up to 48% and UK Tax rates are in the region of  32-40% at present.

There is a 'double Taxation" Agreement with the U.K.

If Resident in Cyprus , you can elect  to pay Tax Locally and claim as a "local resident" a 1st Cyp 9 to 10,000 pound  allowance / exemption from Tax this "option" needs to be carefully considered in conjunction with and including any Pension being received  [see notes on Pensions below]

Pension and Tax:
Again in view of the U.K/Cyprus "double" Taxation Agreement U.K Pensioners 'residing' in Cyprus can elect to have their Pensions paid Gross or Net of U.K Tax - to Cyprus and elect to  be taxed at the local rate of 5%, subject to an exemption allowance of the first Cyp£2,000 p.a.[this is relevant to any Local Income Tax payable by a U.K resident on Income in Cyprus - please see note above]

In comparison, the UK tax rate is generally between 20-40%.

Cororation Tax:

Cyprus C.T. Corporation Tax rate is low currently at 10%.
In Ireland it is currently 12.5% in France 33%.
In the UK approx 20-30%

Capital Gains Tax:

In Cyprus the rate is 20%.
There is a tax free allowance for each individual on the first CYP£10,000 plus an inflation factor index, and less legal fees, and the agreed cost of any improvements and Interest paid.

If the Property was a primary residence for the period of five years the Tax Free allowance is on the  first Cyp £50,000 with other possible, limited exemptions

In the U.K the CGT tax rate is generally 40% after an exemption of £8,200.
In Spain the rate is linked to income tax. and in France 16-40%.

There is no Capital Gains Tax on profits from Cyprus Stocks & Shares

Inheritance Tax:
 

Inheritance Tax was abolished in Cyprus on 1 January 2001.

In the UK currently 40% [after an exemption of £283,000]
In Spain between 5% to 34%

VAT&Stamp Duty

V.A.T in Cyprus is currently 15% and applicable only to the Purchase Price of new residences.

There is no VAT payable on the Purchase / Sale of Resale Property.

Stamp Duty is 0.15% up to CYP£100,000 of value (i.e. £1.50 per every £1000) and then plus 0.2% in excess of this figure.

The Duty must be paid within 30 days of signature of the Purchase Contract - if not an automatic "Penalty" Fine will be levied.

The UK rate is substantially higher at 3% or more on house values in excess of £250,000  In Spain up to 6%.



Transfer Fees:

Payable at 3% to 8% of the Purchase Price payable to the Cyprus Government when Title Deeds are issued by the Land Registry Office.

This can be regarded as a form of additional Stamp Duty levy.

If the Property is Purchased in Husband & Spouse/Partners Joint Names effectively this Transfer Fee is/can then be 'halved'



N.B

The above data is given as a guide only and no responsibility can be accepted for it's accuracy. We stronly recommend counsel with one of our Chartered Accountant contacts or registerd Independant Financial Advisors who can verify and confirm, current Tax arrangements and facilities and 'best advise' based upon your individual situation, to best maximise all "local" Tax advantages.