Consulting and advisory firm PwC Cyprus on Thursday announced that it has published its new tax guide for 2025.
“The guide serves as an important source of information on all tax-related matters in Cyprus and is available as of January 1, 2025, on the organisation’s website only in English,” the company said.
The announcement also noted that this marks the 33rd edition of the guide.
The guide, the company mentioned, “includes valuable insights for both individuals and businesses, assisting them in planning and meeting their tax compliance obligations”.
“The tax guide serves as an essential reference point for current taxpayers residing in Cyprus, as well as for prospective international investors who may consider relocating or establishing their business base in Cyprus,” said Stelios Violaris, partner of tax advisory services at PwC Cyprus.
“It provides a broader overview of the Cypriot tax landscape for 2025, in line with current legislation and practices,” he added.
Moreover, the company explained that “the guide does not constitute, nor should it be perceived as, a substitute for specialized professional advice”.
Delving into the guide itself, the Cypriot tax framework for 2025 is presented as detailed and business-friendly, encompassing personal and corporate taxation.
Residents are taxed on worldwide income, while non-residents pay tax on Cyprus-sourced income.
Residency hinges on spending over 183 days annually in Cyprus or satisfying the “60-day rule” with additional conditions.
Personal income tax rates range from 0 per cent for income up to €19,500 to 35 per cent for income over €60,000.
Specific exemptions apply, such as foreign pension income taxed at 5 per cent on amounts exceeding €3,420.
First employment in Cyprus, under certain conditions, allows for up to 50 per cent income tax exemption for a 17-year period.
Corporate tax is set at 12.5 per cent, one of Europe’s lowest. Exemptions cover profits from securities and dividends, provided certain anti-avoidance measures are met.
Non-residents are taxed only on Cyprus-sourced income, including permanent establishments. Controlled Foreign Company (CFC) rules align Cyprus with EU standards.
VAT rates include 0 per cent, 3 per cent, 5 per cent, 9 per cent, and the standard 19 per cent. Specific exemptions cover residential leasing, financial services, and certain educational and medical services.
New provisions include a 5 per cent VAT for primary residences up to €350,000 in value, with adjustments for disabled individuals.
Other notable taxes include Capital Gains Tax at 20 per cent for Cypriot immovable property sales and Special Defence Contribution on dividends, interest, and rental income, subject to residency and domicile conditions. Inheritance tax was abolished in 2000.
The tax guide also outlines the Cyprus tax diary, along with key deadlines.
At the end of each month, tax deducted from salaries (PAYE), Special Defence Contribution on dividends/interest, and tax withheld on payments to non-residents must be paid.
In terms of key annual deadlines, January 31 is the deadline to submit TD623 for deemed dividend distribution (2022).
By February 28, the electronic 2022 corporation tax return (TD4) should be filed for entities with related-party transaction summaries.
On March 31, the electronic 2023 corporation tax return (TD4) and personal income tax return must be filed by audited entities without related-party transaction summaries.
The April 30 deadline requires payment of the 1st instalment of the 2025 life insurance premium tax.
By May 31, 2024 payroll data (Form TD7) should be submitted. June 30 is the deadline for paying Defence Contribution (H1 2025) on rents, dividends, and interest.
The second half of the year has its own set of deadlines. By July 31, provisional 2025 income tax returns should be filed, and the 1st instalment paid. Additionally, 2024 personal tax returns for self-assessment (non-audited) are also due.
August 1 is the deadline to pay the 2024 final corporate and personal tax for self-employed individuals with audits. August 31 requires the payment of the 2nd instalment of the 2025 life insurance premium tax.
On November 30, the 2023 tax returns, both corporate and personal with related-party summaries, must be filed.
Lastly, by December 31, the 2nd provisional 2025 tax instalment, Defence Contribution (H2 2025), and the 3rd instalment of life insurance premium tax must be paid.
The guide also stressed that the above dates should always be monitored for any changes.
