Cyprus Tax Information and Calculators

Cyprus operates a progressive income tax system with rates ranging from 0% to 35%. Income up to €19,500 is tax-free. The rates are: 20% (€19,501-€28,000), 25% (€28,001-€36,300), 30% (€36,301-€60,000), and 35% (over €60,000). Cyprus also offers various tax benefits for individuals and companies.

Cyprus has one of the lowest corporate tax rates in the European Union at 12.5% on taxable profits. This competitive rate, combined with an extensive double tax treaty network and various tax exemptions, makes Cyprus an attractive jurisdiction for international business operations.

Cyprus applies VAT at three main rates: Standard rate of 19%, Reduced rate of 9% (for specific goods and services like food, pharmaceuticals, and hotels), and Super-reduced rate of 5% (for certain goods and services). Some supplies are zero-rated or exempt from VAT. Businesses with taxable turnover exceeding €15,600 must register for VAT.

Both employees and employers contribute 8.8% each of gross salary to social insurance, making a total of 17.6%. Self-employed persons contribute approximately 15.6% of their net income. These contributions fund pensions, unemployment benefits, and other social services. Contributions are calculated on earnings up to a maximum ceiling.

An individual becomes a Cyprus tax resident if they spend more than 183 days in Cyprus during a tax year. Alternatively, under the "60-day rule," individuals who stay at least 60 days in Cyprus and meet certain criteria (not tax resident elsewhere, not spending 183 days in another country, have business or employment ties in Cyprus) can also qualify for tax residency.

Cyprus offers an attractive Intellectual Property (IP) Box regime with an effective tax rate of 2.5% on qualifying IP income. This applies to income from patents, software, and other qualifying intangible assets. The regime is OECD-compliant and provides significant tax benefits for companies developing or exploiting IP.