Since 1/5/04 a statute in respect of VAT on properties was introduced. In addition to other amendments, this statute introduced VAT on the rate of 15%.

Tax Advantages

Cyprus is unique when it comes to the taxation aspects of living on the island.

Retirees who become residents in Cyprus are taxed on their pensions from abroad at the rate of 5% for amount: exceeding £2.000 annually.

Of course as for all Cypriot tax residents their total annual income up to £9.000 (£10.000 from 2004) can be tax exempt provided that thereafter they will be taxed according to the scale Cypriots are taxed.

Note that one cannot benefit on both.

Additionally, Cyprus has Double Taxation treaties with many European and other countries, safe-guarding its residents from paying tax in both countries. This gives the option to the citizens of those countries to take advantage of the very low rate in Cyprus.