VAT Since May of 2004 a statute in respect of VAT on properties was introduced. In addition to other amendments, this statute introduced VAT on the rate of 15%. INCOME TAXCyprus is unique when it comes to the taxation aspects of living on the island. The following income tax rates apply to individuals: Income (CYP) | Tax Rate (%) | Accumulated tax (CYP) | 0 – 10.000 | 0 | 0 | 10.001 – 15.000 | 20 | 1.000 | 15.001 – 20.000 | 25 | 2.250 | over 20.000 | 30 | |
Retirees who become residents in Cyprus are treated in a special way. They are taxed on their pensions from abroad at the rate of 5% per annum while an exception for the first £2.000 is granted.
In addition, Cyprus has Double Taxation treaties with many European and other countries, safe-guarding its residents from paying tax in both countries. This gives the option to the citizens of those countries to take advantage of the very low rate in Cyprus. For example, UK citizens may take advantage of the Double Taxation Treaty existing between the UK and Cyprus. This enables you to receive private and public pensions and investment income in Cyprus FREE of UK withholding tax.
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