The Personal Taxation FAQ was prepared by the team of experts TaxAppCy.
This FAQ is intended solely to provide general information and additional clarity on how the law applies in various situations. It should not be considered as comprehensive legal or tax advice. For personalized assistance you can contact TaxApp at 70007998 or via email at support@taxapp.cy for personalized assistance.
1. How to get a TIC number in Cyprus if I am not yet employed by a Cyprus company but want to declare my worldwide income?
TaxApp: You can apply for a Tax Identification Code (TIC) through registering on the Tax-For-All (TFA) platform. Please check our article for further information: https://taxapp.cy/how-to-get-a-tax-number/.
2. Does my spouse need to obtain a Taxpayer Identification Number (TIN) if he/she works as a freelancer with clients from different countries?
TaxApp: The answer is not simple. We understand he / she offers services as a ‘self-employed’ (i.e. instead of as ‘an employee’). Assuming the GROSS income earned during the relevant tax year is over EUR 19.500, a Cyprus TIN should be obtained, and a Cyprus tax form should be submitted. VAT / VIES / other tax obligations may also arise.
3. If there was no income during the reporting period, do I need to file a tax return?
TaxApp: If there was no income during the reporting period you are not obliged to file a tax return (since you fall below the income reporting threshold of EUR 19.500). However, you can still file a tax return voluntarily.
4. How often do you need to submit tax reports and declarations in Cyprus?
TaxApp: Cyprus tax return for ‘employees’ and for ‘the self-employed’ (earning less than EUR 70.000 p/y) should be filed annually by 31 July (statutory deadline) the year following the relevant tax year.
5. What penalties are provided for late submission of reports?
TaxApp: There is a fixed fine for ‘late submission’ of the income tax return of EUR 100. Other penalties / fines for late tax-payment/s may also arise (if applicable).
6. What tax obligations arise when receiving income into a Revolut account? How to properly declare such income?
TaxApp: It depends on the type of income (i.e. interest, dividend, profits from trading in stocks, cryptos, etc). Different tax-implications arise depending on the type of income, as well as the recipient’s tax residency status.
7. What tax obligations arise when working through freelance platforms such as Deel, Upwork, Freelancer, and others?
TaxApp: If you are a freelancer (i.e. ‘self-employed’), then you must register to the Cyprus tax authorities as ‘a self-employed’ (i.e. instead of as ‘an employee’) and report such income accordingly. VAT, VIES, Social Insurance, Gesy and other tax implications may also arise.
8. How to correctly declare income received through such freelance platforms?
TaxApp: As stated above, ‘freelancers’ should register as self-employed and report such income accordingly. Reporting (and taxation of such income) depends on several factors and each case should be reviewed separately. Please contact us for more information. You may also check our article for more information: https://taxapp.cy/working-in-cyprus-what-you-need-to-know/.
9. Are there taxation specifics for income received through international stock exchanges?
TaxApp: Income from international stock exchanges (assuming ‘dividend-income’) should be declared (and should be subject to tax) in Cyprus if the taxpayer is Cyprus tax resident and ‘domiciled’. Cyprus tax resident ‘non-domiciled’ individuals, as well as non-Cyprus tax resident individuals are not taxed (in Cyprus) on dividend income. Proceeds from sale of stocks / securities are not taxable in Cyprus if traded (listed) on a recognised stock-exchange. For non-listed shares, Cyprus tax implications may arise (more specifically ‘Capital Gains Tax’), if the company whose shares are disposed of directly / indirectly own Cyprus real estate property. You may check-out our article on the ‘non-dom certification’: https://taxapp.cy/other-services/non-dom-certificates/, as well as test our ‘non-dom’ questionnaire: https://taxapp.cy/domicile-test/
10. How to calculate tax on a bank deposit in another country? Do I need to attach any documents to the declaration in this case?
TaxApp: It depends on the individual’s tax residency and domicile status. Similar to dividends, ‘interest income’ should be declared if the taxpayer is Cyprus tax resident and domiciled. Cyprus tax resident ‘non-domiciled’ individuals, as well as non-Cyprus tax resident individuals are not taxed (in Cyprus) on interest income (unless such income is considered as ‘trading in nature’). Supporting documents may be requested (particularly in case of a tax-examination) but there is no ‘option to attach’ in the tax form. Finally, non-Cyprus tax implications may arise which the taxpayer should be aware of.
11. Does the Cyprus tax office in principle request any documents confirming the income indicated in the tax return?
TaxApp: Yes, the Cyprus tax office may request documents to confirm the income declared, such as contracts, invoices, bank statements, etc.
12. Do you need a tax consultant for a freelancer working with clients from different countries?
TaxApp: A tax consultant should be advised, regardless. Income tax, VAT, VIES, Social Insurance, Gesy and other obligations may arise.
13. In what situations is it especially recommended to contact a tax consultant?
TaxApp: We always suggest contacting a tax consultant when things are not sure. As Benjamin Franklin once said: ‘’Nothing is certain in life except death and taxes’’
14. What is the average cost of tax consultant services in Cyprus?
TaxApp: The cost varies and depends on the services to be provided.
15. How can taxes be reduced? Are there any tax deductions for citizens of third countries?
TaxApp: Citizenship is irrelevant for tax-purposes. There are several tax-deductions / tax-exemptions available, particularly for ‘Cyprus expats’. Notably, as far as Cyprus tax resident ‘employees’ are concerned, there are two ‘types’ of income tax exemptions (20% or 50%) that may be claimed subject to eligibility, which can substantially reduce the income tax cost of an individual employed in Cyprus. Regarding self-employed individuals, there are also several tax-deductions available, particularly in relation to business-related expenses. You may check our quick guides regarding the 20% and 50% tax exemptions.
https://taxapp.cy/wp-content/uploads/2023/03/20-tool.pdf (20%)
https://taxapp.cy/wp-content/uploads/2023/04/50.pdf (50%)
Cyprus’ ‘non-dom regime’ exempts dividends, passive interest and rental income from SDC (Special Défense Contribution).
16. How to fill out a declaration correctly if you work for a company that is not in Cyprus? Meaning that I work as an individual under a service contract. Where can I get the tax return template file that should be filled out (and is it necessary)? Where should I attach it then? (There is nothing like this in my personal account).
TaxApp: There are two ‘types’ of Cyprus tax form, the tax form for the ‘employees’ and the tax form for the ‘self-employed’. Depending on the applicable case the relevant tax-form should be submitted. The fact that someone is employed as an employee of a non-Cyprus registered / tax resident company should be declared in the tax form. No documents can be attached on the tax form but may be requested by the Cyprus tax authorities at some point later.
17. Do I need to attach any documents to the tax return to confirm income from work outside Cyprus?
TaxApp: It is advisable to keep any documents to confirm any income derived from abroad as a tax assessment / tax-examination can be carried out by the Tax Department and you may be requested to provide additional information and documentation.
18. If I worked in another country (not for a Cyprus company) for 4 months at the beginning of the year before moving to Cyprus and at the end of the year I became a tax resident of Cyprus, how can I calculate the tax on this income? Do I understand correctly that in this case since I worked outside of Cyprus for a non-Cypriot company for more than 3 months in the reporting year I only have to pay GESY tax on this income?
TaxApp: Cyprus tax residents are taxed on the worldwide income earned during the whole period of a tax year (which is the same as a calendar year).
19. I am a TCN. I moved to Cyprus in May 2023. The number of days required to become a tax resident of Cyprus was reached in November 2023. Income from what period do I need to indicate in the declaration for 2023? From the beginning of 2023, from May 2023, from November 2023, or not at all?
TaxApp: Once you become a Cyprus tax resident you are taxed on (and are obliged to report) your worldwide income for the whole tax year. Foreign tax credits and specific exemptions may apply depending on the case in hand.
20. I heard that even if I did not earn 19,500 euros in a calendar year and therefore did not submit a declaration, the bank can request a declaration from me. What should I do in this case?
TaxApp: You are still ‘allowed’ to submit a tax return even if you earn below EUR 19.500.