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Retired
Offshore Resident: Cyprus
Due
to the low taxation of Cyprus pension
income, retired residents of Cyprus have
a favourable tax situation and are free
to make investments both in Cyprus and
in other offshore locations with very
few adverse tax consequences.
Foreign
citizens, resident or otherwise, pay 5%
on pension income received in Cyprus above
EUR3,417 per annum. Aside from the Special
Defence Contribution, interest, dividends,
and profits from securities trading are
exempt from taxation.
A
'Special Defence Contribution' applies
to certain types of income as follows:
-
10% on: interest received by a legal
entity unrelated to its normal business
or by an individual with income over
EUR11,960 pa.
-
15% on: dividends received by individuals
in Cyprus.
There is no tax on wealth, no inheritance tax and no alternative
minimum tax. There is a capital gains tax of 20% on disposal of
real estate, and annual real estate taxes based on market value
on the following scale: 0% up to EUR170,860 but based on 1980 values;
the following ratio applies thereafter: from EUR170,860 and up to
EUR427,150 - 2.5:1,000; from EUR427,150 and up to EUR854,301 - 3.5:1,000;
and over EUR854,301 - 4:1,000.
NB:
Cyprus tax rules are considerably more
complicated than the above simplified
summary, and professional advice on the
situation of any particular individual
is advisable.
American
citizens, and nationals of the very few
other countries that tax world-wide income
on the basis of citizenship, won't be
able to take advantage of the low-tax
environment in Cyprus, but for all other
nationals, it is available.
www.lowtax.net
contains extensive information on the
investment, tax and legal regimes in 35
of the main offshore jurisdictions. Further
information is available in our Investment
Information Providers Section, and
the four main types of offshore investment
are described in the Guide
to Offshore Investment on this site.
NB: The suggestions given above do not
constitute investment advice. They are intended
only to assist individuals in finding appropriate
professional advice, which is essential
for anyone planning offshore investment.
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