Cyprus - Other taxes and levies

Other taxes and levies

Taxation of international executives

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Special contribution tax

Every employee of the private sector, self employed individuals and private sector pensioners have to pay, as a percentage of their gross income, a special contribution as part of the economic measures that were enacted. The Special contribution tax is applicable from 1 January 2012 until 31 December 2016.

With regard to employees, the special contribution so calculated will be borne equally between the employee and the employer.

The special contribution payable will be based on the employee’s monthly salary (including benefits in kind) and it will be remitted by the employer to the department of Taxation under the PAYE system.

Please find below the special contribution rates as from 1/1/2014:

Gross monthly income Rates

Contribution of employer

Contribution of employee

€0-€1.500 - - - - -
€1.501-€2.500 2,5%* 1,25% €5-€12.5 1,25% €5-€12.5
€2.501-€3.500 3% 1,50% €12.5-€27.5 1,50% €12.5-€27.5
€3.501- 3,50% 1,75% €27.5- 1,75% €27.5-

* There is a minimum amount of special contribution of EUR10, shared equally by the employer and the employee (i.e. employer EUR5 and employee EUR5).

The above special contribution is calculated on the monthly gross income with no limit on the amount to be contributed.

Social security tax

Are there social security/social insurance taxes in Cyprus? If so, what are the rates for employers and employees?

Employer and employee

The current social insurance rates in Cyprus are as follows:

Type of insurance Paid by employer Paid by employee Total
Social insurance* 7.8% 7.8% 15.6%
Redundancy* 1.2% - 1.2%
Training and development* 0.5% - 0.5%
Social cohesion** 2.0% - 2.0%
Total 11.5% 7.8% 19.3%

* For the 2016 year the maximum amount of insurable earnings has been set to EUR1,046 per week, EUR4.533 per month and EUR54.396 per annum.

** Contributions to the Social Cohesion Fund are calculated on actual earnings, not subject to the above cap.

Compliance requirements

The Cyprus social insurance scheme is earnings related and is obligatory with some exceptions for all employed and self-employed persons on the island. Non-employed persons may under certain conditions join the scheme on a voluntary basis.

For the purpose of calculating employees contributions the actual gross earnings, subject to ceilings as mentioned above, are taken into consideration. In the case of the self-employed, however, the law prescribes notional income, which varies according to the occupational category.

The social insurance scheme provides equality of treatment for nationals and non-nationals. Non-resident companies have the same obligations for the payment of contributions to the social insurance fund and to the various other funds, as all other employers.

Contributions to the various funds are tax deductible. The employer’s contribution is not considered taxable income to the employee. Capital sums payable out of these funds do not form part of the taxable income of the recipients.

The employer is liable for withholding and remitting the total amount of contributions. All contributions are remitted to the Social Insurance Office in the month following.

Gift, wealth, estate, and/or inheritance tax

Are there any gift, wealth, estate, and/or inheritance taxes in Cyprus?

No.

Real estate tax

Are there real estate taxes in Cyprus?

Immovable property tax

Immovable property tax is payable annually on or before 30 September on all immovable property situated in Cyprus. The tax is levied on the market values as at 1 January 1980 of Immovable property owned at the beginning of each year at the following rates:

Value of Property (EUR) Rate per EUR1,000 Total tax (EUR)
0-40.000* 6 240
40.001-120.000 8 880
120.001-170.000 9 1.330
170.001-300.000 11 2.760
300.001-500.000 13 5.360
500.001-800.000 15 9.860
800.001-3.000.000 17 47.260
3.000.001 and over 19 -

* Property owners whose total property value does not exceed EUR12.500 are exempt from Immovable Property tax.

Sales/VAT tax

Are there sales and/or value-added taxes in Cyprus?

Yes, there is VAT. As from 13 January 2014 the Standard VAT rate is 19 percent. Further, a reduced VAT rate of 5 percent applies to various products and services such as food items, entry fees to theaters, cinemas and other similar cultural events.

A reduced VAT rate of 9 percent, among others applies to various pharmaceutical products, hotel accommodation and public and private transport.

Unemployment tax

Are there unemployment taxes in Cyprus?

No.

Other taxes

Are there additional taxes in Cyprus that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, etc.

Stamp Duty

Under Stamp Duty Law, stamp duty is imposed on documents whose subject matter is property, whether tangible or intangible, situated within the territory of the Republic of Cyprus, or, whose subject matter concerns issues, procedures or other objects/points which will be executed or performed in Cyprus irrespective of the place of signature of the document in question.

Please note that in accordance with the Stamp duty legislation, as of 1 March 2013 the scaled amounts of stamp duty for contracts subject to stamp duty are at the following rates:

Value of agreement EUR Rate
Up to – 5,000 0
5,001 – 170,000 0.15%
170,001 and over 0.20%*

* Stamp duty due on agreements effected is capped at a maximum of €20.000 for each agreement subject to stamp duty.

© 2016 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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