Individual & Family Tax Benefits

Individual & Family Tax benefits

Cyprus is one of the safest, sunniest and happiest places in the world, making it an excellent destination to live and work. This, combined with the incentive tax policies and forward-thinking business laws, make it the wise choice for business people of all types.

Being a tax resident in Cyprus is one of the most beneficial financial moves that entrepreneurs, businessmen and any high earning individuals and their families, can make. The tax system conveys many advantages over other international destinations and other European member states.

Combining tax residency with “Non Dom (Non-Domicile)” status allows for even greater personal tax savings. Non-Domicile status is widely available to any foreigners who choose to make Cyprus their business home.

Tax residency rules in Cyprus are some of the best in the world and residency can be easily obtained by those who meet the following criteria:

• Anyone who is in Cyprus for more than 183 days per year is considered a tax resident:

• Or those who spend at least 60 days in the Republic Of Cyprus if the following are also true
  • does not spend more than 183 days in any other country;
  • maintains a permanent home in the Republic that is either owned or rented;carries on a business in the Republic Of Cyprus,
  • is employed in the Republic Of Cyprus or holds an office with a person who is a tax resident of the Republic Of Cyprus at any time during the tax year.

Cyprus Non-Domicile Tax Status:

Those who choose to move to Cyprus and obtain the “Non Dom (Non-Domicile)” status, enjoy some of the greatest savings found around the world. Those who are tax residents of Cyprus and obtain this status are exempt from any Special Defense Contribution (SDC). Some of the tax benefits for individuals who apply and obtain Cypriot Non-Domicile status include:

• 0% Tax on income in the form of dividends. This allows for shareholders to distribute profits freely without having to pay any extra personal tax. The tax saving for anyone owning a business is huge and will only be subject to the small General Healthcare System(GHS) contribution (2.65%).

• 0% Tax on income in the form of rental income. Anyone wanting to invest in properties will not have to pay any tax on rental income making it a great place for those who want to take part in the real estate market. Again they will only have a small General Healthcare System(GHS) contribution to pay (2.65%).

• 0% Tax on income in the form of interest. This allows for those who have loan agreements or hold other forms of financial products where interest is paid, to not have to pay any tax on this income. They only have a small General Healthcare System(GHS) contribution (2.65%) to pay.

Some of the other great benefits that tax residents in Cyprus can enjoy, include the following:

• 0% tax rate on any income for selling securities (shares). This also includes other financial products related to securities including options and derivatives of shares, as well as many more. This makes Cyprus the perfect destination for anyone trading shares or taking part in the stock market. This exemption also applies to privately traded shares and so makes it a great way for owners of businesses to profit from the sale of their shares.

• 0% tax rate on Forex derived income that is not from the sale of foreign currencies and their derivatives.This allows for huge tax savings for anyone or any business that are involved in this market.

• 0% tax on gains arising from the selling of investments. Any gains arising from the disposal of shares, bonds and other similar financial instruments (including options and rights) are exempt from tax. This provides for significant tax advantages to any individuals involved in the world of business and making investments, with additional benefits for those in finance

• 0% inheritance tax means that you can be safe in knowing that your family will be able to inherit all that you have worked to achieve without anyone attempting to take from it.

• 0% Gift tax so that you are able to share your wealth and achievements however you decide, without any tax issues arising.

• 0% Wealth tax so that individuals can use their gains to continue to grow their wealth without any concern of government intervention on their wealth.

• 0% capital gains tax from the sale of immovable property situated outside of Cyprus. This allows for those who sell property abroad to rest assured that they will be able to keep their profits from these transactions in Cyprus.

• For those who can not obtain the Non-Domicile Tax status because they were born in Cyprus and are of Cypriot origin then dividends are taxed at 17%, for everyone else who does

• 100% exemption on remuneration for salaried services rendered outside Cyprus for more than 90 days in a tax year to a non-Cyprus resident employer. This means that Cyprus is a great place for tax residency for those that take on contracted work around the world.

• 100% exemption from income that comes from the renting of a preserved building. This means that investors who wish to take part in the history and beautiful architecture of the island can do so while still profiting from income associated with such buildings.

• 100% exemption on lump sum repayments from life insurance schemes or from approved provident funds.

• Up to 100% exemption from gains on a restructuring or reorganisation of companies. This means that owners will be able to profit and will not be penalised for restructuring their companies, and allows Cyprus to be a great place for company reorganisation.

• 0% Withholding Tax for Cyprus Tax residence thanks to double Tax treaties with 65 countries.

• 100% exemption from profits coming from a permanent establishment outside of Cyprus. This means that owners of business abroad that are considered permanent establishments abroad will not face additional tax in Cyprus.

• The General Healthcare System (GHS) was created to create comprehensive cover for all those on the island. Contributions are only 2.65% for those deriving income from dividends, interest, or rents. In addition taxable income from any one of those sources is capped at a maximum of 180,000 (one hundred and eighty thousand), so if you withdraw higher dividends then this, you will not have to pay any GHS contributions on the additional amount. For waged work 2.65% is paid by the worker and 2.90% paid by the employer for GHS contributions.

For those who will also be getting an income through waged work whilst being a tax resident in Cyprus, they can enjoy one of the following benefits:

Exemptions regarding employment income (can get one of the following):

• The 50% exemption rule:
  • Anyone that takes up employment in Cyprus with an annual income in excess of €100,000 are eligible for a 50% exemption on their income for 10 years. This is excellent for anyone who will be in high earning employment. Furthermore it is a benefit to business owners that are planning to move over some of their high earning employees.
• The 20% exemption rule:
  • Anyone who takes up employment in Cyprus and were not tax resident in Cyprus before the employment, will be eligible for an exemption from taxation of 20% of their income or €8,550 (whichever is lower). This is a great bonus for owners who wish to bring any of their employees over to Cyprus, allowing them to take advantage of this exemption.
• Overseas Pensions:
  • Overseas pensions are exempt from tax up to €3.420 and taxed at 5% thereafter. The taxpayer may opt to be taxed in the normal way, where this special mode of taxation of income results in a higher tax liability. This selection takes place on a year to year basis. This allows for Cyprus to be a great location for retirement and those who receive a pension.
  

As can be seen by some of the various advantages of Cyprus, it is a great place to be a tax resident, form a business in, and enjoy. Somewhere you can enjoy both the great commercial benefits and the lifestyle from the island. Get started with us today and we can help you create the optimum personal, family, and business solution for your company and individual needs.