Cyprus tax plans

Cyprus' tax-free income threshold is set to rise to €20,500 per year, following the announcement of a set of sweeping tax reform plans by President Nikos Christodoulides on Tuesday.

The plans will see the minimum earnings threshold to pay income tax rise by €1,000 from its current level, at which it has sat since Cyprus introduced the Euro in 2008.

Additionally, Cyprus' 35 per cent top income tax rate will now only apply to those earning more than €80,000 per year, rising from its current level of €60,000

President Christodoulides promised his reforms will strengthen Cyprus' middle class, which he described as the "foundation of every prosperous and democratic society".

In addition to the €1,000 additional tax-free amount, parents will receive an extra €1,000 for every dependent they have, while Christodoulides' plan also foresees €1,500 of tax-free income for every parent who is either buying their first house or renting, and €1,000 for a "green investment" on the part of every parent.

Single parents will receive double the ringfenced tax-free amount.

Example of the Republic of Cyprus' average salary of €28,356, saying that a single-person household earning that much will pay €422 in tax under the new plans.

If that person is a parent of two children,  that tax bill would fall to €22, and that that figure would fall to zero if that person is a single parent.