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Capital Gains Tax

LAST UPDATED 11/01/2024

AT A GLANCE

• Capital Gains Tax (“CGT”)

CGT only applies to gains made from disposing of immovable property in Cyprus when the disposal is not subject to income tax. Disposal can include selling, exchanging, gifting, leasing, and more.

CGT is charged at a rate of 20% on gains made from the disposal of immovable property in Cyprus or shares in companies that directly own such property. CGT also applies to shares in companies that indirectly own immovable property in Cyprus where at least 50% of the shares’ value comes from Cyprus-situated property. However, shares listed on a recognized stock exchange are exempt from CGT.

When disposing of company shares, the gain is calculated only on the value of Cyprus-situated immovable property. The taxable gain is calculated as the difference between the disposal proceeds and the original cost of the property, adjusted for inflation using the consumer price index in Cyprus.

Other expenses related to acquiring and disposing of immovable property can also be deducted from the gain, subject to certain conditions.

Individuals may deduct specific amounts from the taxable capital gain, depending on the type of disposal. There are lifetime exemptions available for disposing of a private principal residence, agricultural land by a farmer, and any other type of disposal.

There are also other exemptions available, such as gifts between family members, donations to charities, and exchanges of properties, subject to certain conditions.

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Property taxes

For transfers of immovable property, the Department of Land and Surveys charges fees based on the market value of the property. The fees are calculated using a tiered system, with higher market values attracting higher rates. The statement includes a table showing the rates and fees currently applicable.

However, there are some exceptions to these fees. If VAT is applicable when purchasing the property, no transfer fees are payable. Additionally, if the purchase is not subject to VAT, the transfer fees are reduced by 50%. There may also be exemptions for certain debt-for-asset swap arrangements.

In cases of free transfers of property, such as transfers between family members or spouses, different rates and fees may apply.

There are also fees for mortgage registration, which are calculated as 1% of the current market value.

As of February 2021, a 0.4% levy is imposed on the sale proceeds from all disposals of immovable property within the current control of the Republic of Cyprus. This levy also applies to disposals of shares in a company that owns immovable property, where the buyer of the shares takes control of the company. The obligation to pay this levy falls on the seller of the property.

However, there are still some uncertainties around how this levy will be applied, including issues around the taxing point, the basis of calculation, and potential exemptions.

Corporate residence in Cyprus

As of January 1, 2019, employees are required to contribute 8.3% of their gross salary to the state-administered social insurance fund. The maximum amount of insurable emoluments as of January 1, 2023 is EUR 60,060 per year.

Both the employer and employee pay the 8.3% rate until December 31, 2023. After that, the rate will increase by 0.5% every five years until it reaches 10.3% on January 1, 2039.

Self-employed individuals are required to contribute 15.6% of their income to the social insurance fund as of January 1, 2019. From 2014 to 2018, the rate was 14.6%. The rate will increase every five years until it reaches 20.4% on January 1, 2039.

The amount of contributions is subject to a minimum and maximum limit depending on the profession or trade of the self-employed individual. These limits are determined on an annual basis.

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VAT for individuals

VAT is charged on the sale of goods and services in Cyprus, as well as on the purchase of goods from the European Union and on imported goods. Businesses that are registered for VAT charge VAT on their sales (output tax) and can reclaim the VAT they paid on their purchases (input tax).

The standard VAT rate in Cyprus is 19%. However, there are two reduced VAT rates that apply to certain goods and services: a 9% rate and a 5% rate.

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SPOTLIGHT ARTICLE

Uganda Proposes Private Equity Tax Changes

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	Become a curator TAX NATIVES: CURATOR — Curator The Curator is a fully-fledged member of the Tax Natives team. As such, they are capable of making introductions to other Tax Natives and are also able to take leads from their fellow Natives. The Curator is a fully-fledged member of the Tax Natives team. As such, they are capable of making introductions to other Tax Natives and are also able to take leads from their fellow Natives. However, the Curator has additional responsibilities. They are tasked with the responsibility of managing and updating one of the jurisdiction pages. There is only one Curator membership available for each jurisdiction. Where a Curator fulfils their commitments then they receive a 100% discount against their monthly membership fee. READ MORE	Become a creator TAX NATIVES: CREATOR — Creator The Creator is a fully-fledged member of the Tax Natives team. As such, they are capable of making introductions to other Tax Natives and are also able to take leads from their fellow Natives. However, the Creator has additional responsibilities. They commit to their other Natives that they will produce at least one piece of quality content each quarter – whether an article, video or other valuable content. There are multiple Creator memberships available for each jurisdiction. Where a Curator fulfils their commitments then they receive a 100% discount against their monthly membership fee.	Become an adviser TAX NATIVES: ADVISOR — Adviser The Adviser is a fully-fledged member of the Tax Natives team. As such, they are capable of making introductions to other Tax Natives and are also able to take leads from their fellow Natives. The Adviser Native is a care-free soul and has made no other commitments to his fellow Tax Natives to generate content or curate a jurisdictional page. That's cool. However, the Adviser will be eligible to pay the full monthly membership fee.
Initial admin fee	£250 Free	£250 Free	£250 Free
Minimum membership term	12 months	12 months	12 months
Article contentCreator and Curators must create at least one piece of original, quality-approved content each quarter.	No	YesCreator and Curators must create at least one piece of original, quality-approved content each quarter.	No
Managing and updating your jurisdiction page	Yes	No	No

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Curator

The Curator is a fully-fledged member of the Tax Natives team. As such, they are capable of making introductions to other Tax Natives and are also able to take leads from their fellow Natives.

However, the Curator has additional responsibilities. They are tasked with the responsibility of managing and updating one of the jurisdiction pages.

There is only one Curator membership available for each jurisdiction.

Where a Curator fulfils their commitments then they receive a 100% discount against their monthly membership fee.

Initial admin fee	£250 Free
Minimum membership term	12 months
Article contentCreator and Curators must create at least one piece of original, quality-approved content each quarter.	No
Managing and updating your jurisdiction page	Yes

FREE

Become a creator

TAX NATIVES: CREATOR —

Creator

The Creator is a fully-fledged member of the Tax Natives team. As such, they are capable of making introductions to other Tax Natives and are also able to take leads from their fellow Natives.

There are multiple Creator memberships available for each jurisdiction. Where a Curator fulfils their commitments then they receive a 100% discount against their monthly membership fee.

Initial admin fee	£250 Free
Minimum membership term	12 months
Content creationCreator and Curators must create at least one piece of original, quality-approved content each quarter.	YesCreator and Curators must create at least one piece of original, quality-approved content each quarter.
Managing and updating your jurisdiction page	No

£65 / month

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TAX NATIVES: ADVISOR —

Adviser

The Adviser is a fully-fledged member of the Tax Natives team.

As such, they are capable of making introductions to other Tax Natives and are also able to take leads from their fellow Natives.

The Adviser Native is a care-free soul and has made no other commitments to his fellow Tax Natives to generate content or curate a jurisdictional page.

That's cool.

However, the Adviser will be eligible to pay the full monthly membership fee.

Initial admin fee	£250 Free
Minimum membership term	12 months
Content creationCreator and Curators must create at least one piece of original, quality-approved content each quarter.	No
Managing and updating your jurisdiction page	No

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Capital Gains Tax

AT A GLANCE

Tax experts in the region

How Tax Natives works.

STEP ONE

STEP TWO

STEP THREE

Property taxes

Corporate residence in Cyprus

VAT for individuals

Uganda Proposes Private Equity Tax Changes

What are the membership types available?

Curator Native

FREE

Creator Native

FREE

Adviser Native

£65 / month

Curator

Creator

Adviser

FREE

Curator

FREE

Creator

£65 / month

Adviser

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