Taxation in Cyprus

Taxation
An aspect of fiscal policy
Policies Government revenue Tax revenue Non-tax revenue Tax law Tax bracket Tax threshold Exemption Credit Deduction Tax shift Tax cut Tax holiday Tax advantage Tax incentive Tax reform Tax harmonization Tax competition Double taxation Representation Unions Medical savings account Tax, tariff and trade
Economics Price effect Excess burden Tax incidence Laffer curve Optimal tax Theory Optimal capital income taxation
Collection Revenue service Revenue stamp Tax assessment Taxable income Tax lien Tax refund Tax shield Tax residence Tax preparation Tax investigation Tax shelter Private tax collection Tax farming
Noncompliance Tax avoidance Tax evasion Tax resistance Tax haven Smuggling Black market Transfer mispricing Unreported employment Tax shelter
Distribution Tax rate Progressive Regressive Proportional
Types Direct Indirect Per unit Ad valorem In rem Capital gains Carbon Consumption Dividend Ecotax Excise Fuel Georgist Gift Gross receipts Income Inheritance (estate) Land value Payroll Pigovian Property Sales Sin Single Stamp Steering Turnover Value-added (VAT) Corporate profit Excess profits Windfall profits Negative (income) Flat Wealth
International Financial transaction tax Currency transaction tax Tobin tax Spahn tax Tax equalization Tax treaty Permanent establishment Transfer pricing European Union FTT
Trade Custom Duty Tariff Import Export Tariff war Free trade Free trade zone Trade agreement
Religious Church tax Eight per thousand Teind Tithe Fiscus Judaicus Leibzoll Temple tax Tolerance tax Jizya Kharaj Khums Nisab Zakat
By country List of countries by tax rates Tax revenues as %GDP Albania Algeria Argentina Australia Azerbaijan Bangladesh Bhutan Bulgaria Canada China Colombia France Germany Greece Iceland India Indonesia Iran Ireland Israel Italy Japan Kazakhstan Lithuania Malta Namibia Netherlands New Zealand Norway Pakistan Palestinian territories Peru Philippines Poland Russia Singapore South Africa Sweden Switzerland Tanzania United Kingdom United States Uruguay

Taxation in Cyprus, is levied by both central and local governments. Tax revenue stood at 39.2% of GDP in 2012.^[1] The most important revenue sources are the income tax, social security, value-added tax and corporate tax, and are all collected by the central government.

Income taxes is levied on a progressive rate. Current brackets vary from 0% to 35% in the tax rates for 2014.^[2] Furthermore, various tax allowances apply for trade union fees, donation to charities. The Tax for the year 2014:

Employment income is also subject to various social security contributions. Contributions are subject to a ceiling, for the year 2014 the maximum amount of insurable earnings has been set to €54396 per year.^[3] Employee pay 7.8% of wage and employer contribute 11.5% of corresponding wage.^[4]

Value-added tax apply the most sale of goods and services. The standard rate apply at 19% in 2014, up from 17% since 2013.^[5] A lower rate of 9% apply groceries, books and hotel services. The Cyprus VAT is part of the European Union value added tax system.^[6] Certain goods and services are exempt from VAT. This include export, financial services, rent etc.

Corporate taxes are levied at a rate of 12.5%. Various deductions apply including interest cost of buying other companies, and employers cost to social security.^[7]

References

1. ↑ Index of Economic Freedom, Heritage Foundation. Note: Tax revenue as a percentage of GDP was obtained from the individual country pages, under the "Fiscal Freedom" section. These numbers change. Please update the numbers for individual countries in the list.
2. ↑ "Tax Facts & Figures 2014 - Cyprus" (PDF). PWC. 
3. ↑ "Cyprus - Other taxes and levies". kpmg.com. 
4. ↑ "Cyprus - Other taxes and levies". kpmg.com. 
5. ↑ "Cyprus - VAT rates 2014". KPMG.com. 
6. ↑ "VATGlobal". 
7. ↑ "Tax Facts & Figures 2014 - Cyprus" (PDF). PWC.