Who is obliged to submit an income tax return in Cyprus

21.03.2024

• Tax return submission procedure
• Double taxation
• Application of double taxation rules

According to Cyprus tax law, income tax returns must be filed by:

Tax residents of the Republic of Cyprus (individuals/individual entrepreneurs) with income over €19,500 per year.

Persons with an income of less than 19,500 euros per year are exempt from paying income tax and therefore from filing a tax return.

ℹ️ We would like to remind you that according to the Cyprus tax legislation - individuals are recognized as tax residents of the Republic of Cyprus if they actually stayed in the country for more than 183 days during a calendar year or if the center of their life and economic interests is located in Cyprus. Life interest center - any personal connection, including but not limited to: family, community, political, cultural or civic activities, membership in any organization. Economic interests center - place of paid activity, source of income, available investments, immovable and movable property, as well as insurance policies, loans taken out, bank accounts. Example Person is outside Cyprus and has a company providing services in another country for 8 months per year. During this time his wife and children stayed in Cyprus. He was also paying the mortgage for apartment in Cyprus.  Despite being outside Cyprus for more than 183 days per year, he is a Cypriot tax resident.

Deadline for submission of the tax return: not later than July 31, 2024.

Methods of tax return submission: online only

Tax return submission procedure

1. Registration in the online taxpayer's cabinet (TaxisNet);
2. Obtaining a tax identification number (Tax Identification Code - TIC);
3. Filing a tax return.

If you already have a Tax Identification Code (TIC), you can immediately proceed to filing a tax return.

Information required when completing a tax return

• Personal details of the declarant (full name, Passport details, place of residence);
• Total amount of all income earned in Cyprus during the calendar year;
• Income abroad or received from abroad;
• Entitlements to tax credits/deductions.

Person is required to submit a declaration of income earned in Cyprus, outside and/or from outside the Republic of Cyprus.
 

Types of foreign income subject to mandatory declaration

• Income from the rental or sale of real estate outside Cyprus;
   
• Business income earned by a person registered as a individual enterpreneur in a foreign country;
   
• Dividends and interest;
   
• Gifts of money from close relatives or other persons abroad;
   
• Inherited property; 
   
• Insurance reimbursement;
   
• Income from securities transactions, as well as alienation of shares in the authorized capital of foreign organizations;
   
• Remuneration for work performed/services rendered;
   
• Copyright remuneration received abroad.

Double taxation

In some cases, double taxation may arise.

Example: if an individual is a tax resident of Cyprus and at the same time rents out real estate in Belarus, the obligation to pay income tax may arise in both countries. Bilateral double taxation treaties are in place to avoid double taxation. The Agreement between Belarus and Cyprus provides that income of a resident of one state from immovable property (including rental income) located in the other state may be taxed in the latter state. This rule is enshrined in Article 6 of the DTAA.  It should be borne in mind that the Government of Belarus has decided to suspend certain provisions of the DTAA with a number of countries, including the Republic of Cyprus. In particular, the application of the provisions of Articles 10, 11 and 13 of the DTAA regulating the taxation of dividends, interest and income from the alienation of property, respectively, has been suspended. It is possible that Cyprus will take retaliatory measures. We continue to follow the news.

Application of double taxation rules

At the moment the Republic of Cyprus has double tax avoidance agreements with many countries. In order to apply the rules of double taxation avoidance and obtain the right to a tax credit, the following documents must be submitted to the tax inspectorate:

• Documents confirming the payment of tax in the foreign country;
• A copy of the tax return that was submitted to the tax authority of the foreign state.

Once the above documents are accepted and information about your tax residency status in the foreign country is entered into the database, the Cyprus tax authorities will be able to apply the double taxation avoidance rules.

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