As of the 1st of January 2017, the Special Contribution which was imposed on gross monthly earnings for salary-based employees and the self-employed and private sector pensioners in Cyprus has been abolished. This Special Contribution had been introduced as a special measure to assist the Government with the economic recovery program, with a maximum contribution of 3.5% on gross salaries of EUR 3,501 and above.
For private sector employees and private sector pensioners, the Special Contribution related to services rendered in Cyprus. In the case of self-employed individuals the Special Contribution related to any business carried on in Cyprus.
The payment of the Special Contribution was shared equally by the employer and the employee and was paid through the PAYE system and was tax deductible for both the employee and the employer.
Self-Employer persons, Employers and Employees alike should take notice of the above change and schedule for the correct payments and contributions on a monthly basis.
7 February 2017
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.