The following income tax rates apply to individuals:

Foreign pensions are taxed at 5% and are subject to an annual exemption of €3.417.

Exceptions

• Interest – 100%
• Dividends – 100%
• Profits from the sale of securities(1) – 100%
• Remuneration earnt in Cyprus by an individual who becomes resident in Cyprus during the term of employment.  For the period up to and including the 3 tax years following commencement of the employment – 20% (up to a maximum of €8.543 per year)
• Salary for services provided outside of Cyprus to a non-Cyprus resident employer – 100%
• Lump sum payment for retirement, pension, or compensation for death or injuries. – 100%
• Capital sums accruing to individuals from any payments to approved funds – 100%

(1) “Securities” means; debentures; shares; bonds; and other securities related to legal entities howsoever incorporated and any such options thereon.

Tax deductions

The following is deducted from income:

• Contributions to trade unions or professional bodies – 100%
• Loss of current and/or previous years – 100%
• Rental income – 20%
• Donations to approved charities – The whole amount
• Costs incurred for building maintenance where there is a Preservation Order – Up to €598 per square meter (depending on the size of the building)
• Social Insurance, provident fund, medical fund, pension fund contributions and life insurance premiums (the allowable annual life insurance premium is restricted to 7% of the insured amount) Up to 1/6 of the chargeable Income