Cyprus taxation rates: Residents and Non-resident | Individuals and Companies
|
Taxpayer |
Basis of tax |
Tax levied |
Tax rates (2025) |
| Resident individual | Rental Income | Individual income tax | 20% - 35%* |
| Special Defence Contribution | 3% on the 75% of rental income i.e. 2.25% | ||
| GHS contribution | 2.65% | ||
| Capital gains | Capital gains | 20% | |
| Non-resident individual | Rental Income | Individual income tax | 20% - 35% |
| Special Defence contribution | Not applicable | ||
| GHS contribution | 2.65% | ||
| Capital gains | Capital gain tax | 20% | |
| Resident company | Rental Income | Corporation tax | 12.5% |
| Special Defence Contribution | 3% on the 75% of rental income i.e. 2.25% | ||
| Capital gains | Capital gains | 20% | |
| Non-Resident company | Rental income | Corporation tax | Not applicable |
| Special Defence Contribution | Special Defence Contribution | Not applicable | |
| Capital gain | Capital gain tax | 20% |
* The first €19,500 of the gross income is tax-free for income tax calculation purposes.
Rental Income
Introduction
Rental Income is taxed as part of individual's ordinary private or business income.
Liability to tax
Rental income received by individuals is subject to individual income tax and Special Defence Contribution.
Special Defence Contribution (SDC) is a local tax of Cyprus, applicable to Cyprus tax resident individuals and companies only and applies only on dividend income, passive interest income and rental income. Cyprus tax resident individuals should also be domiciled in Cyprus to be subject to SDC.
The rental income earners are also subject to GHS contributions at 2.65% irrespective if they are Cyprus tax residents or not. In the case of non-resident individuals, they are taxed at Cyprus sourced incomes.
Basis to tax
When the rental income is received either from another individual or a company, for habitation or business purposes, it is subject to individual income tax rates. The Cypriot tax system furnishes the taxpayer with some deductions i.e. 20% of the gross rental income and the whole amount of interest related to the acquisition of the rented property.
Referring to Special Defence Contribution, for rental income generated where the tenant is a Cyprus Company, SDC is withheld at source and it is payable at the end of the month following the month in which the rental income is earned. In all other cases the SDC on rental income is payable by the lessor in 6 monthly intervals on 30 June and 31 December each year. The same conditions apply for GHS contributions.
Companies
Capital Gains
Individuals
Introduction
Capital Gains can be generally subject to both personal income tax and Capital Gains Tax, subject to conditions below.
Liability to tax
Capital Gains are subject to personal income tax if the individual is a tax resident in Cyprus and if it is proved that the sale was executed as part of the individual's regular trading activities.
However, capital gains are subject to Capital Gains Tax if the sale is not part of trading activities. Capital Gains Tax applies irrespective if the individual is a resident or not.
Basis of tax
Capital gains are subject to personal income tax if it can be proved that the transaction is one or a series of trading transactions. In such case, the applicable rates will be from 20%-35%. Incomes up to €19,500 are tax free.
In all other cases, capital gains are subject to Capital Gains Tax at 20% on the gains arising from the disposal of a chargeable property. Chargeable property is a property situated in the Republic of Cyprus or shares in a company owning an immovable property situated in Cyprus.
Companies
Introduction
Capital gains can be taxed under corporation tax or under Capital Gains Tax subject to conditions.
Liability to tax
Capital Gains are subject to Corporate tax if the Company is a tax resident in Cyprus and if it is proved that the sale was executed as part of the Company's regular trading activities.
Basis of tax
Capital gains are subject to Corporate tax if it can be proved that the transaction is one or a series of trading transactions. In such a case, the applicable rate is 12.5%.
In all other cases, capital gains are subject to Capital Gains Tax at 20% on the gains arising from the disposal of a chargeable property.
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European Real estate tax guides
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
