Expat Taxes In Cyprus part 2 – Part one is here.

Benefits of Paying Tax in Cyprus

When it comes to paying taxes, there are a number of factors that need to be considered when deciding where to do so. For those looking for a tax-friendly destination, Cyprus is a great option. Here are seven benefits of paying tax in Cyprus.

Low Corporate Tax Rate

The corporate income tax in Cyprus is 12.50 percent, one of the lowest rates in Europe and much lower than other popular destinations for international companies such as Ireland (12.50 percent), Malta (17 percent), or Luxembourg (21.18 percent). That’s great news for those looking to start a business or expand an existing one.

The low tax rate also applies to individuals with a maximum income tax of 20 percent. In addition, Cyprus has a number of double taxation treaties with other countries, allowing companies to avoid paying taxes twice on the same income.

No Wealth or Inheritance Tax

Cyprus is one of the few countries in Europe that does not levy a wealth or inheritance tax. This is great news for those looking to pass on their assets to their heirs, as there will be no additional taxes levied on top of the sale price.

The only exception is real estate, which is subject to a transfer tax at the rate of either 20 percent or 12.50 percent, depending on how much you paid for it and other factors such as whether there is any mortgage on the property. There are no taxes on gifts given to family members, with only certain exceptions such as cash gifts over €12k per year being subject to taxation.

Tax-Free Dividends

Under the Cyprus tax system, companies are not required to pay taxes on their profits. Instead, shareholders who receive dividends from these companies must declare them as income and pay taxes accordingly.

This is a major benefit for investors, who can take advantage of this policy by investing in Cypriot businesses that distribute their earnings back to shareholders without paying taxes first. This means that investors can take advantage of the low tax rate in Cyprus by investing in Cypriot businesses and receiving dividends from them while paying no income taxes themselves.

No Tax on Foreign Income

If you’re a resident of Cyprus, any money earned outside the country is not subject to taxation. This means you can earn money from overseas without paying taxes back home or having to declare it as income in Cyprus.

This is just one of the many reasons expatriates choose Cyprus over other destinations as their home base. The only exception is if you’re earning income from a Cyprus-based company, in which case you will need to declare it and pay taxes on it.

Ease of Doing Business

 Cyprus is well known for its friendly business environment and ease of doing business. The country ranks fourth in the world when it comes to the overall friendliness of its tax system, with a score of 95 out of 100 on the World Bank’s “ease of doing business” index.

This is great news for companies looking to start or expand their operations abroad because it means there won’t be any bureaucratic hurdles standing in the way of growth.

Access to European Markets

Cyprus is a member of the European Union, which gives companies based in Cyprus access to the 500 million consumers within the EU’s single market. This provides a number of opportunities for businesses looking to expand their operations into new markets.

Additionally, Cyprus is also a member of the Eurozone and uses the Euro as its currency. This makes doing business in Cyprus and Cypriot businesses much easier for companies based in other Eurozone countries.

The benefits of paying tax in Cyprus are clear, and it’s no wonder that the country is such a popular destination for businesses and investors alike. If you’re looking for a place to do business with a low tax rate and a friendly environment, Cyprus should be at the top of your list.

Access to Professional Services

Cyprus has a highly developed financial sector, with many banks and lawyers offering their services at competitive prices. The country also offers a number of tax incentives for businesses looking to establish themselves in Cyprus or expand an existing business there.

This makes it easier than ever before for companies worldwide to do business in Cyprus and take advantage of the country’s low tax rates.

Deductible Expenses & Exemptions for Expats in Cyprus

If you are an expat living in Cyprus, there are a few things you should know about tax deductions and exemptions. In general, you can claim a deduction for expenses related to earning income. This includes items such as.

• The cost of equipment or tools used for work
• Car expenses (e.g., petrol, maintenance and repairs)
• Travel expenses (e.g., airfares, accommodation, and meals)
• Clothing (if it is worn for work), e.g., uniforms and protective clothes – stationery or books used for your job
• Education and training expenses that are closely connected to your current employment, e.g., tuition fees, textbooks, course materials

In addition to claiming deductions for work-related expenses, you may also be able to claim an exemption from income tax on certain allowances and benefits. For example:

• The first €19,500 of your annual salary is exempt from income tax in Cyprus
• Rental income is exempt from tax if you are a non-resident
• Interest income is exempt from tax if you are a non-resident

Social Security Payments Options in Cyprus

In Cyprus, social security payments are made to not working residents. A contribution from employers and employees funds the system. In order to be eligible for benefits, you must have worked in Cyprus for at least 12 months.

The amount of social security payments you receive depends on your income and family status. There are four types of payments:

• Benefits for children
• Retirement benefits (old age)
• Disability benefits (illness or accident)
• Survivor’s pension (after the death of your spouse).

Benefits for Children

The social security system in Cyprus provides benefits for children up to 18. The amount that you receive depends on your income and family status. Benefits are paid until the child reaches the age of 18 or completes their compulsory education, whichever comes first.

If you are receiving benefits for your child, you will be required to provide proof of their age and nationality (i.e., birth certificate).

You must submit an application for benefits within six months of the date that they would have been born or adopted into your family. If you do not submit an application within this time frame, the benefits may be denied. You can apply for benefits online or at your local social security office.

Retirement Benefits

The social security system in Cyprus provides retirement benefits to residents who have reached the age of 65. The amount that you receive depends on your income and family status. Retirement benefits are paid until the recipient dies or reaches the age of 85, whichever comes first.

To be eligible for retirement benefits, you must have worked in Cyprus for at least 12 months. You must also have paid social security contributions for at least six of the last 12 months before you retire. Retirement benefits are usually paid in monthly installments, but they can be paid in a lump sum if the beneficiary prefers. You can apply for retirement benefits online or at your local social security office.

Disability Benefits

The social security system in Cyprus provides disability benefits to residents who are unable to work due to illness or accident. The amount that you receive depends on your income and family status. Disability benefits are paid until the recipient can return to work, dies, or reaches the age of 65 (whichever comes first).

To be eligible for disability benefits, you must have worked in Cyprus for at least 12 months. You must also have paid social security contributions for at least six of the last 12 months before you became disabled. Disability benefits are usually paid in monthly installments, but they can be paid in a lump sum if the beneficiary prefers.

You can apply for disability benefits online or at your local social security office. If you have a disability and need help with daily activities, then you may also be eligible for an additional payment called “disability allowance.” This is paid on top of any other benefits you receive from the government. You can apply for this benefit by contacting your local social security office.

Survivor’s Pension

The social security system in Cyprus provides benefits to the family of a deceased resident. The amount that you receive depends on your income and family status. Survivors’ pensions are paid until the recipient dies or reaches the age of 65 (whichever comes first).

To be eligible for survivor’s benefits, you must have worked in Cyprus for 12 months. You must also have paid social security contributions for at least six of the last 12 months before your spouse died. If you are receiving survivor’s benefits, you will be required to provide proof of your relationship to the deceased (e.g., marriage certificate). You can apply for survivor’s benefits online or at your local social security office.

Frequently Asked Questions about Expat Tax

Do I need to pay taxes as an expat in Cyprus?

If you are working and earning a salary, then yes. You will have to file your tax return even if you do not earn enough to incur any income tax from the government of Cyprus. The income tax is calculated as a percentage of your salary.

Do I have to pay taxes as a permanent resident?

If you earn more than €19,500 annually, then yes, your income will be taxed in Cyprus. If you earn less than this amount each year, then no – you do not need to pay any income tax. Permanent residents of Cyprus who receive other forms of income, such as rental income or dividends, are also liable to pay taxes on that income.

Conclusion

There are a number of tax considerations for expats living in Cyprus. That’s why it’s essential to understand the tax system before relocating to this part of the world. This will determine whether you must pay tax on worldwide income or just local income. For more information, refer to this platform to know what living in Cyprus entails.

Before introducing this article, if you are interested in our core services which are expat financial, insurance and mortgages, you can contact me here. 

The best time to consider your financial situation is when you are moving to a new country.

Introduction

Cyprus is a great place to live in today’s 21^st century. Their Island is renowned for its fabulous beaches, and it also draws people from all over the world because of its stunning mountain. Living in this country can bring many lifestyles and financial advantages to both businessmen and expats who want to work here.

With that being said, it’s also one of the safest places in Europe with a low crime rate. Despite the country’s division, it still remains a peaceful place to live. Whether you’ve been to Cyprus for a holiday or you’ve heard that it’s the ideal place, here is the best platform to confirm what you’ve heard to be true or false.

Moreover, Cyprus has become the first choice for many multi-national companies wishing to provide their business with an EU base. As a result, expats and locals have found it easy to secure jobs. In fact, employees of these companies can enjoy a working and personal life with many benefits in Cyprus.

As we all know that Cyprus is home to many beaches, there are plenty of things to do. It’s a small island nation located south of Turkey and just to the southeast of Greece. Again, Cyprus is the 3^rd largest island in the Mediterranean Sea, after Sardinia and Sicily, in terms of area and population.

Now, it’s high time we disclose what we have for you. If you’ve been surfing the internet to get the right information about moving to Cyprus, look no further. In this article, we have compiled the reasons why moving to Cyprus will make your life better. Not only that, but we will walk you through some fun facts.

5 Reasons Why Cyprus Should Be On Your List

If you’re looking for a new expatriate destination, do keep in mind that Cyprus has numerous advantages. Of course, we understand that packing up to a new environment isn’t easy. Yet, expats who are settled in Cyprus will never forget the experience. Without further ado, let’s quickly check it out.

1.    Warm Temperatures and Ample Weather

Since Cyprus enjoys a Mediterranean climate with blistering summers, its proximity to the equator influences the temperature and overall climate. Besides, people residing on the island experience close to 340 days of golden sunshine in a year.

Also, summer lasts for a minimum of 7 months in the country, and it starts in April and lasts until the end of October. The average daytime temperature is around 32 degrees Celsius during these months and might goes up to 40 degrees Celsius or more. But early summer temperatures are boosted by the hot wind.

2.    History of Severe Conflict

From its inception, Cyprus has been plagued by a history of severe conflict between the Greeks and Turks. Yet, it still remains one of the safest European countries today. While instances of pretty theft are reported, the crime rate across this island is very low compared to other countries in the world. Meanwhile, female travelers should exercise the usual precautionary measures in any area.

3.    Excellent Healthcare System

Whenever we’re talking about countries with the best healthcare system, Cyprus’s name shouldn’t be left aside. This is because; the healthcare system in the North and South of Cyprus is on par with international standards. Like in most other places, expats in Cyprus can choose between the private and public healthcare system.

Aside from this, the country’s national healthcare system offers free medical care at the point of delivery for all residents. Moreover, Cypriots on low incomes are even entitled to free or subsidized treatments. While Cyprus healthcare is excellent, you can find foreign residents that prefer to return to their home countries whenever they need to undergo major surgery.

4.    Excellent Quality of Life and Relaxed Pace

If you’ve been planning to strike a balance between work and your personal life, Cyprus is the perfect place to be. Most expats here enjoy a higher standard of life as residents of this island since there’s a better climate, safety, healthcare system, and higher purchasing power than the global average.

Also, when it comes to the cost of living in this country, foreigners have different opinions. While some believe that the island is quite expensive, others think that almost everything is reasonably priced. In recent years, there has been a significant increase in the number of EU Nationals, Asians, and Russians who have relocated to Cyprus.

5.    An array of Incentives from Government

The real draws for a number of international luxury homeowners are the array of incentives, title deeds, and the opportunity to get an EU passport. According to the country’s law, anyone who spends over 183 days a year in Cyprus is entitled to become a tax resident. This means he/she has to pay an income tax to earn overseas and locally.

Not only that, but foreigners can easily purchase a house or buy land and build a home without disturbance. Meanwhile, the price of real estate is quite reasonable compared to the UK, the US, and many other nations.

What to Know Before Travelling to Cyprus

From what we’ve stated above, have you decided to spend your holiday in Cyprus? If that sounds like a YES, we’ve got you covered. Before you visit Cyprus, there are a few things to consider. This blog post includes all the useful information to make your dream trip as smooth as possible. Now, let’s check it out!

Visa Requirements to Cyprus

Visa requirements are one of the first things to consider if you’re relocating to any country. If you live in the EU, Canada, USA, Australia, or the United Kingdom, you don’t need a visa to visit Cyprus. However, if you’re a non-EU visitor, you need a passport valid for at least three months from the date of entry.

The fact you don’t need a visa makes traveling to Cyprus really easy in today’s twenty-first century. Meanwhile, if you plan on staying more than 90 days in the country, you have to get a registration certificate. You can check out this platform to understand more about the visa types in Cyprus.

Mythical Birthplace of Aphrodite

If you’re not aware, you should now keep in mind that Cyprus is the birthplace of Aphrodite, the Greek goddess of love and passion. Before the goddess reaches this status, the Aphrodite was a beautiful young girl who was born and lived on the island near Paphos, the capital city of western Cyprus.

Home to Patriarchal Society

Inhabitants of Cyprus are very religious. They are not only religious but also worship the Muslim faith, which means men hold most of the power positions and political positions in the country. A good example is when only males can become religious functionaries and run for political office in the country. On the other hand, women generally hold jobs of lesser status and are responsible for managing the house.

Currency in Cyprus

 Cyprus currency widely in use and popularly known is the Euro. The majority of the locals adopted this as their official currency as of January 1, 2008, in a lie of the previously used Cypriot Pound. On the flip side, northern Cyprus uses its currency, known as the new Turkish lira. However, most banks across the country will provide an exchange for all major cash or traveler’s check currency, including Euros.

Driving Laws in the Country

You should always know that the driving laws in your country will definitely be different from another country. In Cyprus, they follow the British UK standard of keeping to the left-hand side of the road. Moreover, many North American travelers have outspokenly complained about the poor road quality and driving standards in the country as they’re dirt-covered and winding in nature.

Language Spoken in Cyprus

The official languages of Cyprus are Turkish and Greek, which is due to the border division of the country. While Greek is widely spoken in the southern portion of the island, Turkish is largely used in the northern part of the country. As a former British colony, English is also widely spoken in the country.

Dress Etiquette in Cyprus

Just like the dressing etiquette in your home country, the fashion jargon in Cyprus is quite similar to the western world. Attire in this country is similar to most European conventions. But when entering a sacred place in Cyprus, men are expected to wear long pants and long-sleeved shirts, while women are expected to wear long skirts and have their arms covered.

Cost of Living in Cyprus (2021)

If you’re considering a temporary or permanent move to this country or retiring, it’s always useful to know more about the cost of living in Cyprus. This ultimate guide covers all the basics, from accommodation, rents, transportation, healthcare, and education prices. We’ll also explain how you can make your money go further while living in Cyprus as an expat. So, let’s get you informed.

Aside from the rent, expat asking questions about living in Cyprus has become a common query. After all, it’s not just housing costs that you should consider, but also understand the cost of utilities, goods, services, and others. To give you an idea of what it entails, take a look at the average cost of living below.

Study Cost for Expats in Cyprus

When it comes to studying, there are a number of well-respected universities in Cyprus, including the largest university in Nicosia in the country. Aside from this, there are also three public higher institutions, including the outstanding University of Cyprus. However, the tuition fees to study in Cyprus vary depending on the institution and your course of study. But to give you an idea, it cost up to £7,500 a year. On the flip side, you can also get a lower fee if you’re on a scholarship in any university.

Pros and Cons of Living in Cyprus

While there are pros and cons of living in a country, Cyprus is no exception. Some of these pros and cons may not be visible immediately when you arrive in the country but sooner or later, you’ll get to know it right. So, here’s a list of pros and cons of living in this country, as stated by expats living in Cyprus for years.

Pros

Beautiful Island and Nature

To give you a head start about what living in Cyprus means, beautiful nature is one thing that attracts visitors to the country.  Also, you’ll enjoy a pleasant Mediterranean climate of long dry summers and mild winter. Meanwhile, rain occurs mainly in the winter, and snow is possible only in the mountain.

A Glorious Expat Community

Apart from the fact that this country has a unique cultural etiquette, Cyprus has joined the United Nations since 1960. And being a British Colony before its independence has resulted in many British people living on the island until today. Moreover, a great number of expats come from Eastern European countries, Russia, and America.

Excellent Infrastructural System

 Another benefit of living in Cyprus is the excellent infrastructural system. The country is reputable for its excellent road system, road signs, international airports, and the two greatest ports located in Limassol and Larnaca. Not only have that, but Cyprus offers excellent telecommunication services with topped notch mobile and internet facilities at high-speed services.

Competitive Tax System

Cyprus, in no doubt, has a competitive tax system taken into consideration all EU and international regulations for inhabitants. For an individual taxpayer in Cyprus, you shall be entitled to a gift or remuneration from the government if your tax is up to date. Meanwhile, non-tax residents are taxed on income derived from sources in the country.

Safe and Comfortable Lifestyle

Research has made it known that Cyprus is ranked to be among the countries with the lowest crime rate.  Additionally, there are no places where it is not recommended to purchase the property. And there are no steel entrance doors, while fencing in the country is usually limited to 1.2m in height.

Again, there’s no democracy and order in this country as their life is wrapped around by the spirit of openness and lightness, opposite to the heavy spirit of pedantry and life according to the rules. In contrast to residents of many countries, Cyprus historically welcomes foreigners. And nearly all the citizens of Cyprus speak English at a high level, and they love to marry foreigners.

High Standard of Living in Cyprus

A high standard of living also constitutes one of the reasons to live in this country as an expat. With the excellent infrastructural facilities and unique healthcare system, the benefits of this country cannot be overemphasized. Moreover, the average lifetime here is 78 years by men and 81 years by women.

Ease of Immigration in Cyprus

The immigration process in Cyprus as of 2021 is extremely liberal. Even with the advent of the global coronavirus pandemic, expats that adhere to rule rules and travel guides find it easy to relocate to the country. Provided that you meet the stated rules and requirements, terms of obtaining a residence permit are within 2 months in this country.

Cons

Low Employee’s Benefits

When you compare the salary in this country with other countries in the western world, you’ll definitely see a huge difference. This is because; Cyprus offers low salaries, and if you’re a Non-European and Non-Cypriot citizen, you’re likely to earn 5 Euros per hour for a part-time job. More so, if your company doesn’t offer you accommodation and food, your full-time job may not allow you to save money.

Fewer Job Opportunities

If you’re relocating to Cyprus, be sure that you’re good enough in a skill to avoid joblessness in the country. This is to tell you that there are fewer job opportunities in Cyprus compared to other European countries. Moreover, most of their products are imported from other countries because they rely on agriculture and tourism.

Lack of Shopping Options

While Cyprus remains a country that’s increasing in its market, there are still significant differences between the shopping options in this country compared to other places. Luckily for expats, there’s always the option for purchasing online. But, if you’re not used to this system, it could be hard to withstand.

Low Welfare Benefits

Even with the amount of tax being paid by residents, we discovered that there are low welfare benefits in the country. In addition, it may not necessarily mean the reason for your relocation, but it is worth considering this factor before moving. Again, the social welfare benefits are not high, and it could even take years for you to qualify for anyone.

Buying Property Can be Challenging

If you’re unable to meet the right agent, buying property in Cyprus can be challenging. This is due to the fact that there are many potential pitfalls that you can easily avoid while buying property. Also, most complaints are usually building quality and hidden unforeseen expenses after buying a property.

Best Areas Suitable for Expats in Cyprus

If you’re looking for a vibrant way of life in Cyprus, why not consider moving to the Southern part? Well, you might be wondering where in the Southern part is the best, right. Of course, there are many places to live aside from the south. But let’s introduce the best places to live in the Republic of Cyprus.

Nicosia

This city is divided in two by the Green Line, and it is a vibrant and quite sophisticated city that offers a perfect blend of urban life and relaxation for expat. The city lies inland, and therefore it can get hotter than the seaside in summer. This not only keeps the place from becoming overcrowded but helps to preserve a truly Cypriot and expats feel the place.

Limassol District

Limassol is a city on the southern coast of Cyprus. It has a modern, cosmopolitan feel which allows expat to move to the area. Aside from this fact, it has quite a few beautiful sites worth visiting, including Amathus Ruins, Limassol Castle, and the Mosque of Djami Kebir. Also, right in the center of this city, there’s a beautiful promenade called Molos, and it offers great walks along the beachfront.

Larnaca

This city is compact, easily accessible, and offers easy access to other regions on the island. Not only that, but Larnaca is known as the place where Cyprus adventures start for most new arrivals, and it is the place where the most popular airport in the country is located. In summary, Larnaca is more relaxed, comfortable, and a bit cheaper compared to Limassol and other cities mentioned above.

Paphos District

Paphos is a lovely coastal city in the southwest region of Cyprus. This town has good amenities and infrastructure that made it different from other cities. From shopping malls, decent road connections to modern hospitals, the benefits of living in this city cannot be overemphasized. It is full of picturesque villages, and British expats quite love it.

Frequently Asked Questions about Cyprus

Is Cyprus a good place for Expat to live?

Of course, yes! Cyprus is one of the safest places to live in Europe. The country has a low crime rate, and despite the division, the country remains the best destination for expats and tourists.

Is it easy to get a job in the country?

As mentioned earlier in this article, getting a lucrative job in Cyprus can be somewhat difficult. And due to the country’s large tourism sector, you can only get seasonal and casual jobs.

What is the highest-paying job in Cyprus today?

Well, one of the highest paying jobs in the country is Executive management.  Not only that, but you should understand that some of the lowest-paid jobs in Cyprus are accounting, professional services, and many others, to mention a few.

Conclusion

Life in Cyprus is enjoyable, and the people in this country are known to be friendly. You’ll definitely enjoy good weather conditions, tax benefits, affordable living costs, and more. Are you still looking at the benefits and the reasons why this country is suitable for expat? Refer to this guide and read carefully to know more.