Rent income for properties located in Cyprus, are subjected to SCD of 2.25% (3% on 75%) and at the same time may be subjected to 2,65% on GHS . For GHS, If the owner (landlord) of the property is not a Cyprus Tax Resident or is a Cyprus Tax Residence through the non-domiciled tax criteria, then there is no GHS obligation.

SCD: Special Contribution for Defence
GHS: General Health System

Tenant obligation

Tenant has an obligation to deduct at source the SCD and the GHS and pay to landlord the net amount. Then tenant has an obligation to pay the withheld amount to the Cyprus Tax Authorities. The payment is due by the end of the following month electronically. The payment can be made through the Cyprus Tax Portal and by completing the form IR614.  On 30 June and 31 Dec each year the tenant needs to provide the landlord the form IR614A. IR614A is the summary of the SDC and GHS withheld at source from the rent.

Landlord obligation

Landlord has an obligation review the IR614A received from tenant and pay any SCD and GHS not paid through the withheld method by the Tenant. The landlord needs to include the SCD ad GHS deducted from the rental income to the annual tax return.

Other information

The rental income should be included in the income tax return of the Landlord and is taxable after the necessary deductions and allowances at the applicable tax rates for companies and individuals.

Disclaimer: The information provided in this article is for general awareness and is not intended to be and do not constitute a professional advice.