If you have been thinking about retiring abroad, you have surely been considering what your dream destination would look like. A warm weather, 65 blue flag beaches, low crime rates, a general health system, high quality infrastructure and services are just a glimpse of what Cyprus has to offer to pensioners.
All these, matched with the benefits of living in a European Union member state, have long been attracting individuals to relocate to Cyprus.
The Government has over the years implemented tax policies and incentives for foreigners, making the country a favourable place to retire.
Upon becoming a tax resident, you will pay taxes in Cyprus on your worldwide income, a significant part of which will be your retirement income. As a pensioner, you have an annual choice of how your retirement income will be taxed:
- At a flat rate of 5% on all your pension income from abroad in excess of €3,420 per annum or
- Under the regular individual income tax rates below:
|Chargeable income for the tax year||Tax rate|
|From 19.501 – to 28.000||20|
|From 28.001 – to 36.300||25|
|From 36.301 – to 60.000||30|
Expats also enjoy several tax incentives related to investment and other income.
Additionally, Cyprus has no inheritance tax or capital gains tax (with the exception of the sale of immovable property and shares in companies deriving their income from immovable property).
The benefits are countless and with the necessary planning and expert advice on potential tax efficiencies, Cyprus can become your retirement home away from home.