PERSONAL INCOME TAX | SALARIES | EMPLOYMENT INCOME

General
Any tax resident legal person or entity with business activities in Cyprus or abroad is taxable in Cyprus on its worldwide income (note1) including Cyprus income. The most common income for an individual is his/her salary. Any income generated in Cyprus is also taxable in Cyprus. For example, if a non tax resident legal person generates income in Cyprus, this income is taxable in Cyprus.

Main income for individuals

  • Salary
  • Income generated as a self employed (i.e. though his/her operations / trading activities)
  • Passive income
    • rental income
    • dividend income
    • interest income
    • affiliate income
    • marketing income
    • online course income

The following types of income are not taxable or are partly taxable.

Income that is not taxable (exempt)

  • Dividend Income (note 2)
  • Profit/gain on sale of financial instruments (i.e. shares)

Income / Revenue that is not taxable (exempt)

  • IP Box Regime: Net Income /Profit from qualified Intellectual Property (note 3) is effectively taxable on 2,5% since there is a 80% tax exemption (12.5% * 20% = 2,5%)
  • Film scheme: Profit from the production of

Notes:

1. Any foreign tax paid outside Cyprus can be credited against Cyprus corporation tax obligation.

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