Cyprus operates a progressive personal income tax system for tax residents, taxing worldwide income. Non-residents are taxed only on Cyprus-sourced income.
Income Tax Rates (2025):
Up to €19,500: 0%
€19,501 – €28,000: 20%
€28,001 – €36,300: 25%
€36,301 – €60,000: 30%
Over €60,000: 35%
Tax Residency Criteria:
An individual is considered a tax resident of Cyprus if they meet either of the following conditions:
Spend more than 183 days in Cyprus during the tax year.
Spend more than 60 days in Cyprus, are not a tax resident elsewhere, have a permanent home in Cyprus, and carry on business in Cyprus.
Special Tax Regimes:
Foreign Pension Income: Taxed at 5% on amounts exceeding €3,420.
First Employment in Cyprus: Eligible individuals can benefit from a 50% tax exemption on remuneration for up to 17 years, provided certain conditions are met.
Social Insurance Contributions:
Employee: 8.3% of gross salary.
Employer: 8.3% of gross salary.
State Contribution: 5.2% of gross salary.