Category: Cyprus Tax

The Cyprus House of Representatives has approved new measures that would increase the threshold at which income tax becomes payable in Cyprus.

The amendment, part of the proposed social cohesion measures, would mean that no income tax is payable on the first CYP10,750 (EUR18,400) of income for 2007. This threshold will increase to CYP11,350 for 2008.

Prior to these changes, the income tax threshold stood at CYP10,000 of an individual’s income. Tax was then payable at 20% on income between CYP10,000 and CYP15,000; at 25% on income between CYP15,001 and CYP20,000; and 30% on income over CYP20,001.

Now that the HMRC in the UK is closing in on those people who rent out their properties in Cyprus the time has come to decide on how you want to pay tax on the income. And how much !!

1. Pay personal tax in Cyprus and Pay personal tax in the UK under a Double Taxation Treaty

OR

2. Or may be transfer property to Cyprus Registered company under an exempt CGT status and only pay 10% Corporation Tax in Cyprus.

See BDO Philippides Chartered Accountants - Link below;

www.bdo.com.cy/downloads/Tax%20aspects%20of%20relocating%20to%20Cyprus%2029%20May%202006%20BDO.doc

Capital Gains Tax (CGT) in Cyprus - update on VAT

The Contract for Sale will refer to a figure for selling you the property.  It will give a figure and there will be a clause in the contract saying that VAT is payable at the rate of 15% of this figure.  The Contract and Invoice are seperate instances with the Invoice arising from fulfilment under the Contract.  The Invoice will act as a Tax Point and the VAT is accounted for seperately as an addition to the contractual sale price.

From The Sunday Times April 15, 2007

Tax amnesty for overseas homeowners

The Revenue is giving people with offshore assets — including holiday homes — two months to come clean. By David Budworth

 
THE government will this week announce an unprecedented amnesty for hundreds of thousands of people with offshore assets, including holiday homes, as it seeks to recover billions of pounds in unpaid tax.

Taxpayers will be given two months to declare unpaid tax on rent from foreign properties, or on cash stashed in accounts in the Channel Islands and other tax havens. Those coming forward will be charged a reduced penalty of 10% compared with 100% in normal circumstances.