Capital Gains Tax

Capital gains tax is imposed on the gains accruing to any person from a disposal of immovable investment property in Cyprus. Capital gains tax is imposed at the rate of 20% on the gain.

The following allowances are given:
a) Cy£10,000 personal allowance (can be used only once)
b) Cy£50,000 from the disposal of a dwelling house, provided that the house was the main residence of the taxpayer for a total period of not less than five years prior to the disposal.

Tax Advantages

Cyprus has double - taxation treaties with most of the Western European Countries and with almost all central Eastern European Countries as well as many others. The purpose of these treaties is the avoidance of double taxation of income earned in any of these countries.

The citizens of any of these countries can receive their pensions in Cyprus and they have the right to elect to pay the income tax in Cyprus at very favourable rates.

Income Tax Rates

Income tax rates for 2006

Taxable Income Cy£	Rate %	Tax Cy£	Cumulative Taxable Income Cy£	Cumulative Tax: Cy£
First 10,000			10,000
Next 5,000	20	1,000	15,000	1,000
Next 5,000	25	1,250	20,000	2,250
Over 20,000	30

Income tax rates for foreign pensions:

Foreign pensions which exceed the amount of Cy£ 2,000 are taxable at the rate of 5%, irrespective of remittance. The recipient of such pension may elect, for each year of assessment, to be taxed at the normal rates.

2003 Tax Legislation

There has been new tax legislation approved in Cyprus, which generally comes into effect from January 1st 2003. The main point is that there is no longer a distinction between Cypriots living in Cyprus and Ex-Patriates living in Cyprus.

An individual is considered a resident of Cyprus if they have lived on the island for more than 183 days in a tax year (1st Jan - 31st Dec). An individual living in Cyprus will be subject to tax in Cyprus on their worldwide income.

Tax Year 2003		Tax Year 2004
Chargeable Income	Tax Rate %	Chargeable Income	Tax Rate %
Up to 9,000	Nil	Up to 10,000	Nil
9,001 - 12,000	20	10,001 - 15,000	20
12,001 - 15,000	25	15,001 - 20,000	25
15,000 +	30	20,000 +	30

Pensions & Income from Interest / Dividends

Pensions received by people who retire to Cyprus will be taxed at a flat rate of just 5%, with the first CY£2,000 free of tax. A double taxation agreement with the UK is in place which having taken the right action will mean that your pensions are not taxed in the UK.

Interest and Dividend income should be declared, whether it is remitted to Cyprus or not and is subject to a defence levy of 10%. There are simple and effective ways of reducing or eliminating this tax.

In summary Cyprus still offers one of the lowest taxation climates around and is far more favourable than the tax in the UK!

Inheritance Tax

No matter where you live in the world there is one form of taxation from the UK that is more difficult to leave behind, Inheritance Tax. If you are British and your worldwide assets exceed £250,000 then your estate is liable to tax.

If your estate totals £300,000	the tax is £20,000
If your estate totals £500,000	the tax is £100,000
If your estate totals £1,000,000	the tax is £300,000

It is advisable to speak with a bona fide Financial Services company who can give up to date information and advise relative to your own personal status.

Wills

It is preferable to make a will in Cyprus to cover movable and immovable property in Cyprus. The will can be worded in such a way as to deal with Cyprus property only so as not to affect either property in other countries of any wills already existing in other countries.

A will made in another country referring to Cyprus property may be valid in Cyprus, but is should be noted that on the death of the testator the Grant of Probate must first be obtained in the country where the will was made and then "resealed" in the Cyprus Courts, which inevitably leads to excessive delays and additional expense.

There is no Inheritance Tax in Cyprus.

Healthcare

Cyprus offers a high standard of health care both in the state hospitals and the many private hospital and clinics. Most of the Doctors have studied and/or trained in the U.K. or other European Countries. The insurance companies in Cyprus offer many advantageous private health schemes.

Import Of Pets Into Cyprus

Before bringing a pet into Cyprus, an import license must first be obtained from the Cypriot veterinary services.

Dogs and cats will only be allowed into Cyprus on production to the veterinary officer at the Cyprus port or airport of an animal import certificate issued by a duly authorised veterinary officer of the Government of the exporting country attesting that the animal:

a) Was clinically examined not more than 72 hours prior to exportation and found to be in good health and free from signs of rabies and any other infections or contagious diseases.
b) Was kept since birth or for six months prior to shipment in the exporting country where no cases of rabies were officially reported for the past two years.

The charge will be about Cy£300 and include inspection fees, home quarantine fees and V.A.T., but not transportation costs.