How to Register for Tax in Cyprus?

In recent years, Cyprus has established record-breaking economic and financial development growth. It has strongly invited foreign direct investors to further diversify the economy. Along with this, there has been improvement in the country’s tax system. It has played a crucial role in the country’s efforts to make Cyprus one of the most attractive areas for individuals, businesses and investors. Presently, the country boasts a network of double taxation agreements and the lowest corporate tax rates compared to other EU members. 

Cyprus tax policies are based on the internationally competitive environment, best practices, and the highest standards of fairness and transparency. The country also enforces the EU Anti-Tax Avoidance Directives, implemented by the European Council. 

Apart from its attractive tax policies, investors will find Cyprus a well-regulated industry. It offers a unique business platform with a robust economy. Let us find out the process of registration for taxes in Cyprus. 

Who Needs to Register for Tax in Cyprus?

Mandatory registration for income tax in Cyprus is required for anyone with an annual gross income exceeding €19,500. The same applies to any legal entity, such as companies and businesses registered in the country. 

Additionally, registration for value-added tax is also required for people and legal entities registered in Cyprus with goods or services having a taxable transaction value that exceeds €15,600 in the last 12 months. 

Companies or individuals acquiring in Cyprus while they are from other EU states may also be required to register for VAT if, at the end of one month over the preceding year, the value of their acquisition exceeds the limit of €10,251.61 or they have reasonable grounds that it will exceed the said threshold in the next 30 days. 

How to Register for Tax in Cyprus? 

Registration for tax in Cyprus must be done personally. You need to visit the Tax Department district office nearest you to acquire from TD 2001. This is the application for obtaining a tax number. If required, you may also fill in form TD 1101, the application for VAT registration. You may submit both forms by hand at the district office or send them by post at the PSC Cyprus. 

Those who are already registered taxpayers but need to modify their data should use the TD 2003 form for the Amendment of Taxpayer’s data. Once completed, this form may also be submitted by hand at the nearest district office. 

Additionally, an original copy of the application for VAT registration must be signed and accompanied by support documents such as a copy of the official receipt to prove that the entity carries out taxable activities in Cyprus. Some examples of these documents include invoices related to their operations and transactions or copy of their contracts. 

How To Apply for A Personal Tax Number in Cyprus?

Suppose you need to check your eligibility to apply for a personal tax number in Cyprus. In that case, you can use the IRS or the Interactive Tax Assistant tool to determine if you need to apply for an Individual Taxpayer Identification Number. If you do, you need to complete an IRS Form W-7, which is the IRS Application for Individual Taxpayer Identification Number.  

What are the Requirements for Registration for Income Tax in Cyprus?

Every individual and entity registering for income tax in Cyprus must include documentary requirements with their application. Some mandatory requirements include a Valid PAN Card, Mobile Number, and Email Address of the contact person.

Additionally, apart from the original application form, supporting documents for the following will also be needed:

  • Cyprus Citizen – Identity card
  • European Citizen – Certificate of Registration to the Civil Registry and Migration Department
  • Other Foreign National – Residence Card issued by the Civil Registry and Migration Department
  • Companies and Legal Entities – Copies of Certificate of Incorporation, Certificate of Registered Office, Certificate of Directors and Secretary, Certificate of Shareholder.

How Much Should You Earn To Pay Tax in Cyprus?

Non-Cyprus residents also need to pay tax and are required to file income tax returns for income accrued from sources within the country. Some examples of these are salaries from employment in Cyprus. However, there is also a tax threshold of €19,500. Meaning that any individual earning less than €19,500 is not required to pay income tax

What is the VAT Number in Cyprus?

VAT numbers are only given to businesses in Cyprus for tax purposes. Only entities registered for VAT will have a VAT number or VRN. 

How Does Tax in Cyprus Work?

Residents in Cyprus are taxable on their worldwide income, and tax rates start at 20% and rise progressively to 30% for individuals earning more than €60,000. Fortunately, foreign pension income has a special rate in Cyprus, and pensioners may choose to have it taxed each year, and the rate is 5% if it exceeds €3,420. 

Do You Need to Pay Tax in Cyprus?

Any individual residing and working in Cyprus is considered a tax resident. You will be taxed on any income accrued from sources within and outside the country. Those who are not tax residents of Cyprus will only be taxed on income accrued from sources within the country.