Rental income received from immovable property may be subject to different tax treatments depending on the tax residency of the recipient, the location of the property and the status of the taxpayer.
Understanding the applicable tax rules is important for both Cyprus residents and international investors who own property in Cyprus.
Tax Residents of Cyprus
In general, Cyprus tax resident individuals and companies are taxed on their worldwide rental income, subject to the provisions of Cyprus tax legislation and any applicable double taxation agreements.
Depending on the circumstances, rental income may be subject to:
- Income Tax or Corporation Tax, as applicable.
- General Health System (GHS/GeSY) contributions, where applicable.
- Special Defence Contribution (SDC), where applicable.
Cyprus tax resident individuals who qualify as non-domiciled are generally exempt from SDC on rental income, although GHS contributions may still apply in accordance with the legislation.
Non-Tax Residents of Cyprus
Non-tax residents are generally subject to Cyprus taxation only on rental income derived from immovable property situated in Cyprus.
The applicable tax treatment will depend on the nature of the income and the taxpayer’s individual circumstances.
General Health System (GHS)
GHS contributions may apply to certain categories of rental income received by Cyprus tax resident individuals, subject to the applicable rates, annual contribution limits and exemptions provided under the legislation.
Tax Compliance
Individuals and companies receiving rental income may have tax reporting and filing obligations in Cyprus.
The applicable filing requirements depend on factors such as:
- Tax residency.
- Type of taxpayer.
- Source of the rental income.
- Other taxable income received during the tax year.
Professional advice should therefore be obtained to ensure that all reporting obligations are met correctly and on time.
How UHY Can Help
Our experienced tax professionals can assist with:
- Tax advice on rental income.
- Cyprus tax residency matters.
- Income Tax, Corporation Tax and GHS obligations.
- Tax return preparation and filing.
- International tax planning for property owners.
- Ongoing tax compliance services.
For more information on how we may assist you, please contact us at uhy@uhy.com.cy or call +357 22379210.
The contents of this publication are provided for general information purposes only and should not be regarded as legal, tax or professional advice. Specific advice should always be obtained based on your particular circumstances before taking any action.