Residents, Non-residents and Tax

Understand what taxes apply to residents and non-residents in Cyprus...

Foreigners who are tax resident in Cyprus will have a percentage of interest on their account retained for tax (paid to the Ministry of Finance). This payment may be recorded on the tax return.

Non-resident foreigners should be aware of the EU Savings Tax Directive which affects residents of one EU member state that earn interest income from investments or deposits held in another (or in one of the other jurisdictions that have agreed to apply the Directive).

This is a multilateral agreement to exchange information and provide transparency other assistance in relation to tax matters. In 2013 the automatic exchange of information was extended to include information on dividends, capital gains and account balances.

A report on the taxation of savings income in the form of interest payments is available from the European Commission

Special Contribution for Defence

All residents of Cyprus are subject to special defence contribution known as amyna. Banking organisations are obliged to deduct this contribution from at the rate of 30% from interest paid or credited to accounts maintained by Cyprus residents.

The following contributions apply to:

  • Dividends: 20%
  • Interest: 30%
  • Interest received by an individual from Cypriot Government Savings Certificates: 3%
  • Rental income (gross) 2.25%

Those considered to be Cyprus residents are:

  • Individuals who reside in Cyprus for one or more periods exceeding a total of 183 days during a tax year
  • Legal persons whose management and control is exercised in Cyprus

Those with a bank account in Cyprus but who are considered non-residents must complete a Declaration for Exception from the Deduction of Defence Contribution on Interest form at the bank. At the end of each year they will then receive, via post, a questionnaire for ascertaining whether the conditions relating to the term non Cyprus Resident are met for the year. It is a simple form which requires the bank account holder to declare the arrival and departure date of each visit to Cyprus for that year and calculate the total number of days present on the island. The form must be signed and returned promptly to the appropriate department stated in the instructions.

Further information

Deloitte publish an annual booklet called Cyprus Tax Facts which outlines the latest amendments to taxation laws in Cyprus.