At the crossroads of three continents, at the meeting point of great civilisations, Cyprus has developed - and for thousands of years has maintained - its own civilisation centre, assimilating the various influences from those who conquered the island. It has remained a thriving centre of Greek culture with some specific characteristics.
The island is now a full member of the European Union. The Island of Aphrodite is the third largest island in the Mediterranean, situated in the east and in close proximity to the busy trade routes linking Europe with the Middle East, Russia, Central Asia and the Far East. The island is enriched with a culture that combines elements of the West and the East, bringing together the best of both worlds. Paphos, declared a World Heritage Site by UNESCO because of an abundance of ancient treasures, invites us all to discover its ancient heritage.
LEGAL & FINANCIAL
The legal system in Cyprus is modelled on the British system due to its colonial legacy. In addition, with EU membership, Cyprus has harmonized its laws and regulations in line with the acquis communautaire. In effect, this means that EU citizens can now buy more than one property in Cyprus.
The Land Registry system is one of the most advanced and reliable systems in the world, being based on the British equivalent. Purchasers of property in Cyprus will be far more secure with regards to matters such as title deeds than they might be in other Mediterranean countries. All legal information regarding the legal procedures associated with purchasing property in Cyprus is available from the Nikos Papa Construction Ltd.
PERSONAL INCOME TAX
All Cyprus tax resident individuals are taxed on all chargeable income accrued or derived from all sources in Cyprus and abroad. Individuals who are not tax residents of Cyprus are taxed on certain income accrued or derived from sources in Cyprus.
Foreign pension income is taxed at the rate of 5%. An annual exemption of €3.420 is granted. The taxpayer can however elect to be taxed at the normal tax rates and bands set out above. This is a choice which may be made year-on-year.
All Cyprus tax resident companies are taxed on their income accrued or derived from all chargeable sources in Cyprus and abroad. A non- Cyprus tax resident company is taxed on income accrued or derived from a business activity which is carried out through a permanent establishment in Cyprus and on certain income arising from sources in Cyprus. A company is a resident of Cyprus if it is managed and controlled in Cyprus.
Foreign taxes paid can be credited against the corporation tax liability. The corporation tax rate for all companies is 12.5 % There are several tax deductions for expenses There are several exemptions and deductions.
VALUE ADDED TAX
VAT is imposed on the supply of goods and provision services in Cyprus, as well as on the acquisition of goods from the European Union (EU) 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 which they receive (input tax).
If output tax in a VAT period exceeds total input tax, a payment has to be made to the State. If input tax exceeds output tax, the excess input tax is carried forward as a credit and set off against future output VAT. Imposition of the reduced rate of 5% on the acquisition and/or construction of residences for use as the primary and permanent place of residence.
The legislation provides for the following four tax rates:
Zero rate (0%)
Reduced rate of five per cent (5%)
Reduced rate of nine per cent (9%)
Standard rate of nineteen percent (19%)
Registration to the VAT
Registration is compulsory for businesses with (a) turnover subject to VAT in excess of €15.600 during the 12 preceding months or (b) expected turnover subject to VAT in excess of €15.600 within the next 30 days. Businesses with turnover of less than €15.600 or with supplies that are outside the scope of VAT but for which the right to claim the amount of the related input VAT is granted, have the option to register on a voluntary basis.
VAT declaration - payment/refund
VAT returns must be submitted quarterly and the payment of the VAT must be made by the 10th day of the second month that follows the month in which the tax period ends.
By the Employer 7,8 %
By the Employee 7,8 %
By the State 4,6 %
Total 20.2 %%
The contribution rate for employees will change on 2019,2024,2029,2034 and 2039. The contributions of self-employed persons are 14.6% of their income.
Social insurance contributions are restricted to a maximum amount that is usually increased annually. In case that the wage or salary is higher than the maximum amount, no contribution is paid on that higher amount.
Compared to many countries Cyprus has flexible property buying procedures. People of Cypriot origin and EU citizens are allowed to purchase however much property they choose. A non-EU citizen is entitled to FREEHOLD ownership of a villa, apartment, or a piece of land of up to 4,014 m2.
International business units may also acquire premises for their activities or for residence of their foreign employees.
Paying for property
It is a requirement to pay for your property in Euro. Personal cheques, bank drafts and telex transfers might be acceptable.
Nikos Papa Constructions Ltd can deal with all your money transfers ensuring that the necessary certificates relating to the property purchase are obtained from the Central Bank of Cyprus.
Approval of the Council of Ministers
Having signed a contract of sale for your property, it will be necessary to make an application to the Council of Ministers to grant its approval for a non-Cypriot to acquire immovable property.
Nikos Papa Constructions Ltd will assist in the processing and monitoring of your application at no extra cost.
Selling your property
In case of selling property, foreigners are allowed to repatriate the funds immediately to the value of the purchase price (including any amounts spent on improvements and/or additions to the property).
Profits can also be repatriated.
GOOD NEWS FOR PROPERTY BUYERS - Property Transfer Fees reduction of 50% is now permanent.
The Cyprus Finance Ministry announced that the temporary arrangement to reduce Property Transfer Fees by 50 per cent, is now PERMANENT; the law implementing the change, ‘Land and Surveys Department (Fees and Rights) (Amendment) (No. 2) Law’, was passed on 14th JULY 2016 at a plenary session of the Cyprus parliament.
In its announcement the Finance Ministry stated “The above arrangement aims to boost additional growth in the construction industry and attract new investments from both the domestic, and the foreign markets.”
Property Transfer Fees: these are necessary in order to transfer FREEHOLD ownership to your name.
This can be done as soon as the relevant Government Authority has issued the title deed and the purchase has been settled.