Tax Overview
One of the first questions we had when planning our move was: How does tax work in Cyprus - and will it be more or less than back home? If you’re wondering the same, this guide is for you.
The good news? Cyprus has one of the most expat-friendly tax systems in Europe, especially if you're planning to work, freelance, or retire here. Let’s break it all down - no jargon, just the stuff you actually need to know.
🇨🇾 Who Counts as a Cyprus Tax Resident?
First, you’ll need to know whether you qualify as a tax resident - because that determines what you’re taxed on.
You’re considered a Cyprus tax resident if you meet either of these:
Spend more than 183 days in Cyprus in a calendar year
OR
Spend at least 60 days in Cyprus, do not reside elsewhere for more than 183 days, and maintain a permanent home or carry out business in Cyprus
So yes—you can technically become a tax resident in just 60 days, which is very appealing for remote workers, freelancers, and business owners.
📊 Income Tax Rates in Cyprus (2024)
Cyprus has progressive tax bands. That means you only pay higher rates on the portion of income that falls into each band—not your full salary.
Tax Rate - Annual Income (€)
0 – 19,500 = 0%
19,501 – 28,000 = 20%
28,001 – 36,300 = 25%
36,301 – 60,000 = 30%
60,001+ = 35%
That’s right - you pay no income tax at all on your first €19,500 of earnings.
🧾 Non-Dom Status: A Major Expat Perk
Cyprus has a special status called Non-Domiciled (Non-Dom) Residency, designed specifically to attract foreign residents.
If you qualify (which most new expats do), you can enjoy:
0% tax on worldwide dividends
0% tax on interest income
For up to 17 years!
If you earn passive income through investments or dividends, this is a huge advantage.
👨👩👧 For Employees & Families
If you’re employed by a local company, your income tax and social insurance contributions will be automatically deducted.
Employees contribute 8.3% of their salary to social insurance
Employers also contribute on your behalf
Additional small contributions go toward healthcare (GESY), social cohesion, etc.
If your spouse isn’t working, only one of you needs to register as tax resident to open a bank account, sign a lease, etc.—but it’s often useful for both to register.
💼 Freelancers & Self-Employed
If you’re self-employed in Cyprus, you’ll need to:
Register with the Tax Department
File annual returns
Pay social insurance based on your profession and income band
Possibly register for VAT (if you earn over €15,600/year)
Hiring an English-speaking accountant makes life a lot easier—and we can recommend some great ones in Limassol.
💳 What About VAT?
VAT (Value Added Tax) is Cyprus’s version of sales tax. The standard rate is 19%, but:
Some goods and services (like utilities or children’s items) are taxed at 5% or 9%
Others (education, medical care) are exempt
Most day-to-day things include VAT in the price, so you won’t notice it much.
✅ Quick Recap
You can become a Cyprus tax resident on either the 183-day or 60-day rule
Your first €19,500 of income is tax-free
Non-doms get 0% tax on dividends and interest
Employees and freelancers contribute to social insurance
VAT is 19%, with exceptions
💡 Pro Tip: Get Personal Advice
Tax can be surprisingly relaxed in Cyprus, but it’s still worth speaking to a professional - especially if you’re managing multiple income streams, pensions, or foreign assets.
Need a referral to a reliable, English-speaking accountant? Drop us a message - we’ve got a few names we trust.
Don’t forget to check out our articles on Banking in Cyprus and Cost of Living!
