Cyprus: Personal Taxation - Determination of Taxable Income

Last Updated: 24 November 1997
Taxable Income
Residents are subject to personal income tax on the aggregate income accruing in, derived from or received in Cyprus from:

  • a trade, business, profession or vocation. The general provisions for determining annual profits from a trade or business for individuals are the same as those for companies (see Chapter 4). The accruals method is applied except in the case of professionals who may choose to be taxed on a cash basis
  • employment, including the estimated annual value of any quarters, residence and any other allowance granted in respect of employment (whether in money or otherwise)
  • the annual value of immovable property, used for residence and not for gain, which is taken at 4% of the value as assessed by the Land Registry Office and shown on the registration certificate of the property
  • pensions and annuities
  • rents, royalties, premiums and any other profits or income arising from property, including the value, not exceeding cost, of tenants' alterations, etc., becoming the owner's property at the termination of the tenancy
  • profits from farming, etc.
  • any sums received on the sale of patents or patent rights, and royalties or other income received in respect of such patents
  • dividends
  • interest
  • any other profit not elsewhere specified

Exempt Income

Certain types of income are specifically exempted from income tax. These include retirement and death gratuities, commutation of pension, scholarship income, widows pension, provident funds and certain other types of income explained in more detail in the chapter on tax incentives.

The following annual investment income exemptions apply to individuals:

  • interest from any bank or co-operative society operating in Cyprus or from a public company debenture loan up to C£600
  • dividends from an approved public company up to C£1.200
  • interest from Cyprus government securities, saving certificates and from deposits with the Housing Finance Corporation without any limitation.

Deductions from Taxable Income

Generally all outgoings and expenses wholly and exclusively incurred for the production of income are deductible for tax purposes. Specifically, however, the following deductions are allowed:

  • professional tax
  • professional subscriptions
  • trade union subscriptions
  • charitable donations and contributions, subject to limitations
  • interest on a housing loan up to C£500
  • interest for any other loan up to C£100
  • 30% of the cost of purchasing shares of a first issue in a public company, subject to limitations
  • 40% of the amount saved under the Save As You Earn (S.A.Y.E.) scheme of the Housing Finance Corporation, subject to certain limitations
  • 30% of the agricultural income up to a maximum deduction of C£3.000
  • rent paid for private residence up to C£300 provided the family income does not exceed C£10.000.
  • deduction of 20% of gross rental income before deducting wear and tear allowances and loan interest.
  • donations to approved charities in Cyprus with receipt up to C£20.000 plus 50% of the amount over C£20.000
  • cost of bus tickets where the return distance between work and residence at rural area is over 30 kilometres - The whole amount.
Personal Allowances

The personal allowances deducted before arriving at the taxable income are:
spouse    C£500
child under 16 not attending secondary education  C£500
child in secondary education in Cyprus C£500
child in third grade school 
in Cyprus (tax relief not to exceed C£300)  C£1.500
child serving in the National Guard C£500
old age (over 65), (tax relief not to exceed C£300) C£1.500

Married persons are taxed separately and any allowances to which both spouses become eligible are apportioned according to their taxable income.

  • life insurance premium relief on local policies insuring self or spouse's life (not children). Premiums allowed are restricted to 7% of capital sum insured and premiums and contributions must not exceed 1/6th of taxable income. Furthermore, where a policy, issued on or after 1.1.1988, is cancelled at any time within the first six years part of the premiums already allowed as tax deductions are treated as income of the policyholder in the year of cancellation. If the cancellation is made at any time within the first three years the amount treated as income is 30% of the premiums allowed. If the cancellation is made at any time within the fourth, fifth and sixth year the income is 20% of the premiums allowed
  • contributions to the social insurance fund or other approved pension, provident or other funds are allowed, subject to limitations
  • premiums or contributions to an insurance company under a pension or medical scheme approved by the Commissioner of Income Tax . The tax relief will be restricted to 20% of the premiums or contributions
  • Double Taxation Relief

When the income is partly derived from foreign sources, certain types of income may be subject to double taxation. Relief from double taxation is given by virtue of double tax treaties concluded between Cyprus and other countries or, in the absence of any tax treaty, under unilateral provisions in the domestic law. Most treaties follow the OECD Model Convention.

Tax Rates

The tax rates for individuals are graduated starting at 20% on chargeable income from C£5.001 to C£8.000, 30% from C£8.000 to C£11.000 and 40% thereafter.

Tax Credits

Foreign income taxes on income charged to Cyprus income tax may be credited against the Cyprus tax liability. The credit is limited to the amount of Cyprus tax on that income from a foreign country . Taxes withheld at source, such as tax deducted from employment income and dividends, are credited against the income tax liability. Provisional tax paid during the year on income other than from employment is also credited against the final tax liability.

This information was correct as of 24 December 1996.

The contents of this article are intended to provide a general guide to the subject matter. Specialist advice should be obtained before any action is taken.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.