CAPITAL GAINS TAX

Companies and individuals are subject to capital gains tax, at the rate of 20%, on gains arising from the disposal of:

1. immovable property situated in Cyprus

2. shares in a company which owns immovable property situated in Cyprus (excluding shares listed on any recognized stock exchange)

Indexation allowance applies on the market value of the immovable property at 1 January 1980 (or on the actual cost of acquisition of and improvements to the property if acquired later)

Life time tax-free capital gains

Individuals are entitled, only once in their life, and not for every disposal, to deduct the capital gain of the following:

  

Description	Exemption
Disposal of private residence	CY£50,000 (for each Residence under certain circumstances)
Disposal of agricultural land	CY£15,000 (only applies to farmers if they can be defined as such according to certain criteria)
Any other disposal of immovable property	CY£10,OOO

The aggregated deduction based on the above for any person is restricted to a maximum amount of CY£50,000.

 Exemptions:

· transfers of shares as a result of company reorganizations

· transfers on death

· gain on disposal of shares which are listed on any recognized stock exchange

· gifts by a family company, of which all :

· shareholders are members of the same family, to

· any of its shareholders, provided that the property

· gifted had itself been acquired by the company by

· way of gift, and that the property is held by the donee for at least three years

· gifts between spouses and relatives up to the third degree

· gifts to family companies provided the shareholders continue to be members of the family for five years after the date of transfer

· gifts to approved charitable institutions expropriations

· exchange of properties where the values of the immovable properties being exchanged are equal

ESTATE DUTY

Estate Duty has been abolished for deaths on or after 1 January 2000.

The legal representative of a deceased person is required to submit to the Inland Revenue a statement of assets and liabilities, usually Capital Statements, within six months from the date of death.

All outstanding tax obligations have to be settled before the estate of the deceased can be distributed to the beneficiaries

SOCIAL GRANTS

For each child receiving full time higher education in Cyprus or abroad (subject to restrictions) CY£1,500 per annum For each dependent child under the age of 18 years of a Cyprus tax resident family as well as on the family income Grant depending on the number of children in the family Blind persons CY£1,800 per annum

SOCIAL INSURANCE CONTRIBUTIONS

DESCRIPTION RATE NOTE Employer's contribution 6.3% Maximum earnings on which contributions are payable CY£425 per week or CY£1842 per month Employee's contribution 6.3% Maximum earnings on which contributions are payable CY£425 per week or CY£1842 per month Self-employed individual 11.6% Based on a minimum income specified for the various professions and vocations Social cohesion fund 2%   Redundancy fund 1,2%   Industrial training fund 0,5%   Holiday fund 8% Exempt if other acceptable arrangements exist

STAMP DUTY

DOCUMENT TYPE DUTY Agreements   Fist CY£100000 1,5 cent for every CY£10 Over CY£100000 2 cent for every CY£10 Without fixed sum CY£20 Certified copies of agreements CY£1 Power of attorney   For a specific transaction CY£1 General CY£3 Bill of exchange   Payable on demand or on sight 50 cent Payable otherwise As for an agreement Bill of lading CY£2 Cheques 3 cent Custom documents   Vessel's manifest for export or import of goods CY£20 Letter of credit CY£1 Letter of guarantee CY£2 Receipts For sums between CY£2 to CY£20 2 cent For sums over CY£20 4 cent

Exemptions

1. Transactions made in the course of a company reorganization

2. Transactions relating to any property situated outside the Republic or to any matter or thing to be performed or done outside the Republic, irrespective of the place where it is executed

IMMOVABLE PROPERTY TRANSFER FEES

Value per plot CY£ Rate % First 50,000 3 50,001-100,000 5 Over 100,000 8

In the case of a transfer of property to a family company, the fees are refundable after five years if the property remains with the company and there is no change of shareholders

In the case of property transferred from a family company to one of its members, the fees are calculated on the assessed value written on the title deed as follows :

· To a spouse 8%

· To a child    8%

· To a relative 4%

 In the case of company reorganizations, transfers of immovable property are not subject to transfer fees

IMMOVABLE PROPERTY -ANNUAL TAX

Market value At 1 January 1980 in CY£ Rate per thousand First 100,000 - 100,001- 250,000 2,5 250,001- 500,000 3,5 Over 500000 4