Cyprus

Social security contributions

As of 1 January 2024, the employees' own contribution to the state-administered social insurance fund is 8.8% of their gross remuneration, with a maximum annual cap on insurable emoluments as of 1 January 2025 of EUR 66,612. The rate of 8.8% applies for both employee and the employer as of 1 January 2024 and for the next five years. Thereafter, the rate will increase every five years until it reaches 10.3% to 10.7% (depending on the results of the actuarial studies to be performed) as of 1 January 2039.

As of 1 January 2024, the contributions of self-employed persons are 16.6% of their income (15.6% for 2019 through 2023). Thereafter, the rate will increase every five years until it reaches 19.6% to 20.4% (depending on the results of the actuarial studies to be performed) as of 1 January 2039. The amount of the contributions is subject to a lower and a maximum limit, depending on the profession or trade of the self-employed person. These limits are set on an annual basis.

General Health System (GHS)

As per General Health System Law of 2001 (89(I)/2001) as amended 2017, a GHS is introduced in Cyprus aimed to provide to the population equal access to a holistic health care system. Patients will have the option to select a health care provider from the private as well as the public health care sector.

Contributions relating to the implementation of the GHS commenced on 1 March 2019 at reduced rates. As of 1 March 2020, the full rates apply as per the table below:

* Relates to holders of public or local authority office or other office, the income out of which does not come within the scope of (i) or (iii) or (iv) or (vii).

GHS contributions are capped at EUR 180,000 annual income.

Capital gains tax (CGT)

CGT applies only to gains relating to Cyprus-situated immovable property when the disposal is not subject to income tax.

Disposal for the purposes of CGT specifically includes sale, exchange, lease, gifting, abandoning use of right, granting of right to purchase, and any sums received upon cancellation of disposals.

CGT at the rate of 20% is imposed on gains arising from the disposal of immovable property situated in Cyprus or the disposal of shares in companies that directly own Cyprus-situated immovable property. CGT is also imposed on disposals of shares in companies that indirectly own immovable property situated in Cyprus where at least 50% of the market value of the said shares derives from Cyprus-situated immovable property. Shares listed on any recognised stock exchange are excluded from CGT.

In the case of disposal of company shares, the gain is calculated exclusively on the basis of the gain relating to Cyprus-situated immovable property. The value of the immovable property will be its market value at the time the shares were disposed of.

The taxable gain is generally calculated as the difference between the disposal proceeds and the original cost of the property plus any improvements as adjusted for inflation up to the date of disposal on the basis of the consumer price index in Cyprus. In the case of property acquired before 1 January 1980, the original cost is deemed to be the value of the property as of 1 January 1980 on the basis of the general valuation conducted by the Land Registry Office under the Immovable Property Law.

Other expenses that relate to the acquisition and disposal of immovable property are also deducted from the gain, subject to certain conditions (e.g. interest costs on related loans, transfer fees, legal expenses).

It is important to note that, subject to conditions, land, as well as land with buildings, acquired at market value (excluding exchanges, donations, and foreclosures) from unrelated parties in the period 16 July 2015 to 31 December 2016 will be exempt from CGT upon their future disposal.

Lifetime exemptions

Individuals can deduct the following from the amount of the taxable capital gain:

The above exemptions are lifetime exemptions subject to an overall lifetime maximum of EUR 85,430.

Other exemptions are also available, under relevant conditions, including gifts between spouses, children (including foster children), and third degree relatives, gifts to family companies, gifts to charities, exchange of properties, donations to a political party, etc.

Consumption taxes

Value-added tax (VAT)

VAT is imposed on the provision of goods and services in Cyprus as well as on the acquisition of goods from the European Union and the importation of goods into Cyprus. Taxable persons charge VAT on their taxable supplies (output tax) and are charged with VAT on goods or services that they received (input tax).

The standard VAT rate in Cyprus is 19%. Three reduced VAT rates, a 9% rate, a 5% rate, and a 3% rate, as well as a zero rate VAT, apply in Cyprus.

See the Other taxes section in the Corporate tax summary for more information.

Immovable property transfer fees

The fees charged by the Department of Land and Surveys to the acquirer for transfers of Cyprus-situated immovable property are as follows:

It is important to note that:

• No transfer fees are payable if VAT is applicable upon purchasing the immovable property.
• The above transfer fees are reduced by 50% in case the purchase of immovable property is not subject to VAT.

Certain debt-for-asset swap arrangements may, under certain conditions, be exempted from transfer fees.

In the case of free transfers of property, the transfer fees are calculated on the value of the property as follows (‘value’ in these cases refers to values as of 1 January 2013):

• From parents to children: Nil.
• Between spouses: 0.1%.
• Between third-degree relatives: 0.1%.
• To trustees: EUR 50.

Mortgage registration fees are 1% of the current market value.

Immovable property transfer levy

As of 22 February 2021, a 0.4% levy is imposed on the sale proceeds from all disposals of immovable property that is within the current control of the Republic of Cyprus. (i.e. both trading-nature and capital-nature disposals).

As of 18 November 2022, the levy applies on all disposals of immovable property as well as disposals of shares of a company that, directly or indirectly, holds immovable property.

In cases involving a direct disposal of immovable property, the levy is imposed on the disposal consideration, whereas in cases involving a disposal of shares of a company, the levy is imposed on the latest general valuation undertaken by the Department of Land and Surveys.

The obligation for payment of the levy lies with the seller.

The following direct or indirect disposals of immovable property are exempt:

• Debt for asset swaps.
• Qualifying reorganisations.

• Shares listed on a recognised stock exchange.

During the period 22 February 2021 to 17 November 2022, different provisions applied with respect to certain aspects of the levy. For example, during this period the levy is applied only on disposals of immovable property itself and disposals of shares of a company that directly held immovable property to the extent that the buyer of the shares assumes control of such company.

Immovable property tax (IPT)

IPT has been abolished as of 1 January 2017.