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Individual - Deductions
Last reviewed - 18 May 2026Personal allowances
Charitable contributions to approved charities (with receipts) are deductible.
Also deductible for PIT purposes, subject to an overall maximum deduction of 1/5 of the chargeable income, are the total of life insurance premiums and permanent or partial incapacity (the deductible annual insurance premium is restricted to 7% of the insured amount), employee contributions to the social insurance fund, individual pension, provident fund contributions (the deductible pension/provident fund contribution is restricted to 10% of remuneration), employee medical fund contributions (the deductible medical fund contribution is restricted to 2% of total incomes subject to income tax), and employee contributions to GHS (see General Health System in the Other taxes section for more information).
Business deductions
For PIT purposes, generally, expenditure wholly and exclusively incurred for the generation of taxable income is deductible against the individual’s income. Such expenditure should be supported by invoices and relevant receipts or other supporting documents.
Research and development (R&D) expenses
As of 20 July 2022, expenditure for scientific research and for R&D (as recognised by international accounting standards) that is incurred by a person (i.e. legal entities and individuals) that: (i) carries on a business and (ii) has the economic ownership of the intangible asset that arises, or it’s possible to arise, from incurring such expenditure is deductible for IT Law purposes.
Any such expenditure of capital nature is tax amortised in a reasonable manner over its useful economic life (as per accepted accounting principles) with a maximum period of 20 years.
For any such expenditure incurred during the years 2022-2030, an additional allowance is granted equal to 20% of the expenditure incurred, which (i) cannot be claimed in parallel with the 80% allowance on net profit under the Cyprus nexus IP regime (i.e. cannot be claimed in parallel with New Cyprus IP Box) and (ii) a person may elect, for each tax year, to waive claiming (in whole or in part).
Employee deductions
For PIT purposes, generally, any employment-related expense of the employee (including contributions to trade unions or other professional bodies) is deductible, unless reimbursed by the employer. Travelling expenses between home and work are not deductible.
Other deductions
As from 1 January 2026, the following additional deductions are available:
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Premiums paid by a person under an insurance policy for insurance of residence against natural disasters. |
The whole amount (up to EUR 500 to each spouse or partner or single person) |
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Donations or contributions to approved cultural institutions. |
The whole amount (up to EUR 50,000) |
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Tax deductions are introduced based on family income which does not exceed:
For a single person (i.e. a person who lives without any children or spouse), his/her income must not exceed €40,000 to qualify from the tax deductions on interest or rental expense and on capital expenditure. |
To each parent EUR 1,000 for the first child, EUR 1,250 for the second child and EUR 1,500 for the third and each additional child. For single-parent families, as well as in the case of parents where one of the parents has full custody, the amount of the deduction is doubled. Up to EUR 2.000 to each spouse or partner or single person in respect of interest expense or rental expense for the purpose of primary residence. Up to EUR 1,000 to each spouse or partner or single person for capital expenditure incurred to improve the energy efficiency of a primary residence and in relation to electric vehicles. |
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