Cyprus: Personal Taxation
Capital Gains Tax
Capital gains tax is charged at the rate of 20% on gains arising from the disposal of immovable property in Cyprus or the disposal of shares of companies which own immovable property in Cyprus. Gains from the sale of shares listed on the stock exchange are excluded from capital gains tax.
The taxable gain is the difference between the proceeds of sale and the original cost of the property plus the cost of improvements cost, adjusted for inflation from the date of acquisition.
Some disposals are exempt from taxation, including transfer by reason of death and gifts between relatives. There are some circumstances in which rollover relief is available if a gain is used for the purchase of a further property.
The first EUR85,430 (at the time of writing) of a gain made by an individual on disposal of a personal property is exempt from tax. This exemption is available only once. The immovable property tax is paid on 30th September every year.
Capital gains tax does not apply to profits from the sale of overseas real estate by non-residents, by offshore entities, or by residents who were not resident when they purchased the asset.
Under the Capital Gains Tax (Amendment) Law, No. N119(I) of 2002, effective 1st January 2003, gains accruing from disposal of shares listed on any recognised Stock Exchange will be exempted from tax.
Gains accruing from disposal of immovable property held outside Cyprus and shares in companies, the property whereof consists of immovable property held outside Cyprus, will be exempted from capital gains tax.