Tax facts for Cyprus individuals

Income tax

Income tax is charged progressively, as in the table below (bands applicable before the 2026 tax reform):

Allowable tax-deductible expenses

• Life insurance premiums (restricted to 7% of the insured amount)
• Employee contributions to the social insurance fund
• Employee contributions to an individual pension
• Employee contributions to a provident fund (restricted to 10% of remuneration)
• Employee contributions to a medical fund (restricted to 2% of total income)
• Employee contributions to GeSY
• Contributions to trade unions or other professional bodies

Research and Development (R&D) expenses allowance equal to 20% of the expenses incurred.

Exemptions

20% exemption

• S8(21): 20% of the remuneration or €8,550 from any employment exercised in Cyprus by an individual who was resident outside Cyprus before the commencement of their employment. As from 26/07/2022 this no longer applies and S8(21A) applies.
• S8(21A): 20% of the remuneration for first employments after 26/07/2022 by individuals who, immediately before their employment in Cyprus, were not resident for at least 3 consecutive years. It applies for 7 years starting from the tax year following the year of commencement of employment.

50% exemption

• S8(23): 50% of employment remuneration exceeding €100,000, applicable for 10 years. As from 26/07/2022 this no longer applies and S8(23A) applies.
• S8(23A): 50% of employment remuneration exceeding €55,000 for employments after 01/01/2022, for individuals not resident in Cyprus for at least 10 consecutive tax years; applicable for 17 years.

100% exemption

Remuneration for salaried services rendered outside Cyprus for more than 90 days in a tax year to a non-Cyprus-resident employer.

Tax residency

An individual who spends more than 183 days in the Republic is considered tax resident. An individual can also be tax resident while spending 183 days or less in the Republic, provided that all of the following conditions are met within the same tax year:

• does not spend more than 183 days in any other country;
• is not tax resident in any other country;
• spends at least 60 days in the Republic;
• maintains a permanent home in the Republic (owned or rented);
• carries on business, is employed or holds an office in the Republic.