* This article was updated to reflect 2024 tax rules. This article is relevant for the tax year ending 31 December 2024.

MAIN TYPES OF TAXES FOR THE SELF-EMPLOYED IN CYPRUS

If you are self-employed in Cyprus, there are 3 main types of taxation which you should be aware of:

Below is a high-level summary of only the main details you need to know, with regard to these 3 types of taxes:

1. Social Insurance Contributions

The social insurance rate for self-employed individuals in Cyprus is 16.6%.
However, note that this 16.6% is applied on your ‘estimated earnings’, not your actual earnings.
Your ‘estimated earnings’ are determined by the tax department annually based on a person’s years of experience, and field of occupation.
You are however allowed to file a special application and request to be taxed based on your actual income (typically used by individuals whose actual income is lower than their estimated income).
Social insurance is payable every 3 months.
GESY (National Healthcare System of Cyprus) is typically considered together with social insurance. Details of the relevant contributions can be found in this link. For self-employed individuals, rate of GESY contributions is 4%.
For more detailed information about social insurance contributions in Cyprus, check the social insurance services information brochures directly.

Every self-employed individual with income higher than €19.500 in a tax year, is obliged to submit a tax declaration (form TD1).
If your income is less than €19.500, you have the option (but not the obligation) to submit a tax return, if you so wish.
You can get your TIC (Taxpayer Identification Code) by registering with the Tax Department.
There are various exceptions/deductions to which you may be entitled to, with regards to income tax.
You can find the Cyprus income tax rates here.
Income tax is payable in 2 equal instalments:
1. The first instalment is due in July of the current year (ie it is payable in advance, mid-year, based on estimated profits).
2. The second instalment is due in December (being actual tax, minus what you already paid provisionally in July).
One final thing to keep in mind is that if your revenue (not profit) as a self-employed exceeds €70,000 in a year, you have an obligation to submit audited financial statements together with your tax declaration.

You can find our complete VAT guide here.
If your revenue (‘taxable transactions’) in any 12 consecutive months exceeds €15.600, you have an obligation to register with the VAT department.
Further to the above, there are various other situations which trigger an obligation to register with VAT. You can find on this link all events which trigger an obligation for compulsory VAT registration.
Additionally, it should be noted that VAT registration can also be done voluntarily in certain cases.
Submission of VAT declarations is due every 3 months. VAT tax due is likewise payable every 3 months.
The standard VAT rate is 19% in Cyprus.
There are reduced rates (9%, 5% and 0%) for specific types of transactions.
You can reclaim VAT on some purchase invoices dated up to 3 years before the registration date.
If you want to read VAT legislation directly, check the tax department’s website here.

For more information about our services and annual support packages for self-employed individuals, get in touch with CBU today.