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Cyprus Tax Privileges

Personal effects, household goods and furniture can be imported duty free by immigrant retirees, provided they are for personal use and have been used for a reasonable period of time - approximately one year. Also, there is no duty on a car, and retired couples enjoy the additional concession of two duty free cars.

Cost of Living
In addition to the low cost of utilities, there are many items much cheaper than other European countries, and Cyprus regularly appears in the Union Bank of Switzerland survey on prices and earnings as one of the top three least expensive countries for goods and services.

A recent survey of all European Community countries ranked Cyprus fifth highest in standard of living.

Taxation

Cyprus is unique when it comes to the taxation aspects of living on the island.

The following income tax rates apply to individuals:

Chargeable income:
The income tax scale rates for 2008 are:
Up to €19,500: 0%
€19,501 - €28,000: 20%
€28,001 - €36,300: 25%
Over €36,300: 30%
As an employee you will also pay 6.3% social insurance contributions (your employer will also pay 6.3%).
Net self-employment income in Cyprus (calculated similarly to UK net self-employment income), is taxed at the progressive scale rates. Losses from both the current and previous years may be set against general income. You also pay social insurance contributions at 11.6%.

Retirement
Retirees who become residents in Cyprus are taxed on their pensions at the rate of 5% per annum, while an exemption of the first 3,417 € is granted.

 

 

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