Tax Returns Now Compulsory

having just had an email reply to a question of whether those who have an income of less than €19500 have to complete a tax return... they have confirmed currently legislation hasnt YET been implemented to do so...... so basically there is no need to do so at this time... but it also indicated it is coming.. they just dont know when.

Hi Toon,

Is this still the case? No compulsory tax return for 2020?

as far as I am aware its not been enacted yet... but am sure it will be eventually.... they have no other mechanism to collect the GESY payments that are not collected through the social welfare system.

Even the online tax return portal Taxisnet still doesnt have the 2020 tax return available for completion..

A tax clearance certificate is required on selling or  transferring a property, and on death. If you are not registered for tax you will create delay and additional costs.

100% correct

Note you can register with the tax authorities but it’s currently not essential to complete the tax return... how the tax dept deals with that is a matter for the individuals and tax dept to resolve... but it can cause issues when selling a property

HI All,

came across the following article which is an overview of the income tax system in Cyprus, Im not sure of the source of the article or whether it has been updated since the article was written, but it may be a useful introduction to the tax system in layman's terms:

"Cyprus Tax System: Key Concepts Explained"

In order to be subject to the Cyprus tax system it is of course a necessity that you are a tax resident on the island. In order to be such, it is a prerequisite that you fit in on of the following two categories:
You must spend more than 183 days in any given calendar year in Cyprus, or
You must spend at least 60 days in Cyprus but at the same time not be a tax resident in any other country, must spend fewer than 183 in any single country in a given calendar year, and have both a permanent home in Cyprus (rented or owned) and carry out business or be employed in the country.
Importantly, Cyprus taxation laws make a distinction between residents and Cyprus-domiciled persons. According to current laws, being domiciled in Cyprus applies to residents who were either born in Cyprus or have lived there for at least 17 years. As we’ll explain later on, it is important to understand the difference between Cyprus residents and domiciles because the issue has a bearing on eligibility for certain taxes.
Personal Taxation
A person who, in accordance with the regulations explained above, is an established tax resident in Cyprus is subject to tax on all their worldwide income in Cyprus . This is beneficial due to the fact that due to Cyprus’ low taxation rates in combination with the plethora of double tax treaties, your overall income tax is minimized.
Income Tax
Cyprus income tax system for individuals is progressive. This means that the more you earn, the greater percentage of your income will be subject to taxation. The tax-free threshold is €19.500 - you won’t pay any tax on the first €19.500 you earn in any given year. Then, the tax rate progresses from 20% to 35% according to the following scheme:

Tax Rate    Income (in EUR)
20    19,501-28,000
25    28,001-36,300
30    36,301-60,000
35    60,001 and more


It is important to stress that, under the progressive taxation regime, a Cyprus tax resident who earns more than €60,000 will not pay a flat /!\ I AM A STUPID SPAMMER /!\5% of their total income in taxes. Let’s illustrate that on the example of a person whose total annual income is €70,600. Such an individual would pay their taxes according to the following model:

Taxable Income (in EUR)    Rate (%)    Tax Amount (in EUR)
First: 19,500    0    0
Next: 8,500    20    1,700
Next: 8,300    25    2,075
Next: 23,700    30    7,110
Rest: 10,600    35    3,710


The total amount of tax a Cyprus tax resident who earns €70,600 annually will be required to pay under the country’s progressive tax system is, then, €14,595.
Foreign Pension Income
Cyprus tax system offers a convenient way of settling a person’s taxes on retirement pension coming from their country of origin. All income from pensions is tax-free up to €3.420 per year. If your yearly income from pension exceeds this amount, it is subject a flat-rate 5% tax. However, you can also choose to add your pension to your overall yearly income. That way it will be taxed along with the rest of your annual earnings according to the progressive tax system explained above.