The tax treatment of rental income in Cyprus depends upon the tax residency of the recipient and the location of the immovable property:
Tax residents of Cyprus
Rental income earned from immovable property situated in Cyprus or abroad, received by a tax resident of Cyprus ( a company or an individual), is subject to the following three taxes:
• Income Tax
• Special Defense Contribution (“SDC”) *
• General Healthcare System (“GHS”)
* Non domiciled tax residents are exempt from SDC on rental income
Non-tax residents of Cyprus
In the case of non-tax residents of Cyprus, only rental income from immovable property situated in Cyprus is subject to Cyprus Income Tax.
However, such income is exempt from SDC, but is subject to GHS.
IR1 (Annual Tax Return) Submission
- Employees and/or pensioners have an obligation for IR1 submission when their total gross yearly income is above EUR19,500
- Any individual with income from rent and/or preserved buildings situated in Cyprus, has an obligation to submit an IR1, irrespective of their total gross income.
Note: total gross income includes salaried services, pensions, rents (gross), use (income) of preserved buildings, interest income (gross), dividends (gross), and any other income
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