Cyprus: Personal Taxation
Capital Gains Tax
Capital gains tax (CGT) is charged at the rate of 20% on gains arising from the sale of immovable property in Cyprus or the sale of shares of companies which own immovable property in Cyprus. Gains from the sale of shares listed on any recognisable stock exchange are excluded.
In addition (from December 2015), capital gains tax also applies to shares in companies that own Cypriot immovable property indirectly, when at least 50% of the shares’ market value derives from the immovable property. However, CGT is only levied on gains from immovable property situated in Cyprus.
The taxable gain is the difference between the proceeds of sale and the original cost of the property plus the cost of improvements, adjusted for inflation from the date of purchase.
Some disposals are exempt from taxation, including transfer due to 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. Additionally, land or land with buildings bought or otherwise acquired from 16 July 2015 and 31 December 2016 is exempt from CGT.
The first €85,430 (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 in a person’s lifetime. Immovable property tax is paid on 30th September every year.
Capital gains tax does not apply to profits from the sale of overseas property by non-residents, offshore entities, or residents who were not resident when they purchased the asset.
Under the Capital Gains Tax (Amendment) Law, No. N119(I) of 2002, effective from 1 January 2003, gains accruing from disposal of shares listed on any recognised Stock Exchange are exempt 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, are exempt from capital gains tax.