Cyprus

{"ftc_utility":"high","fbar_trigger_notes":"Cyprus bank accounts are required for most residents to receive salary, pay rent, and transact locally. A single Cyprus bank account with a balance over USD 10,000 at any point in the calendar year triggers FBAR filing. Cyprus is in the EU and participates in CRS/FATCA reporting, so US account holders are identifiable to the IRS. Bank of Cyprus, Hellenic Bank, and Alpha Bank are the main retail banks.","ftc_utility_reason":"Cyprus taxes employment and business income at progressive rates up to 35%. US citizens in Cyprus who earn above the FEIE limit (USD 126,500 for 2024) will have significant Cyprus income tax paid, which generates Foreign Tax Credits usable against US tax liability on the same income. The FTC is the preferred method for higher earners; FEIE is preferred for lower earners. Cyprus taxes are creditable under the US system as they are income taxes.","presence_day_count_notes":"Cyprus residency is established at 183 days per year. Cyprus also has a 60-day residency rule for individuals who do not reside in any other country for more than 183 days per year, do not be a tax resident elsewhere, carry out business or are employed in Cyprus, and maintain a permanent home in Cyprus. The 330-day physical presence test for FEIE is achievable within normal Cyprus residency parameters. No US visa issues apply as Cyprus issues national visas and residency permits independently.","typical_qualifying_method":"either","housing_exclusion_available":true,"physical_presence_test_applies":true,"estimated_housing_exclusion_usd":18000,"local_tax_rate_on_earned_income":0.35,"bona_fide_residence_test_applies":true}

{"pension_income":{"notes":"Foreign pension income is taxed at a flat 5% rate in Cyprus on amounts exceeding EUR 3,420 per year, with an election available to be taxed at progressive rates instead. The vast majority of recipients choose the 5% option. Cypriot state pensions are subject to normal progressive income tax rates. The 5% flat rate is one of the most attractive pension tax rates in the EU.","tax_rate":0.05,"locally_taxed":true},"social_security":{"notes":"Under the US-Cyprus tax treaty, US Social Security benefits paid to a Cyprus resident are taxable only in the US. Cyprus does not impose local tax on US Social Security income received by Cyprus tax residents. This is a favorable outcome for US retirees in Cyprus.","locally_taxed":false,"treaty_protection":true},"roth_distributions":{"notes":"Roth IRA distributions are not explicitly addressed in the US-Cyprus treaty. Cyprus domestic law would likely treat distributions as foreign pension income, potentially applying the 5% flat rate on amounts over EUR 3,420. Cyprus does not have an equivalent account structure, so classification depends on how Cypriot tax authorities view the specific distribution. US tax advisors recommend seeking a private ruling or confirmation from the Cyprus Tax Department before relying on the 5% rate for Roth distributions.","locally_taxed":true},"us_401k_ira_distributions":{"notes":"The US-Cyprus Double Tax Treaty (1984) covers pension and retirement distributions. Under the treaty and Cyprus domestic law, foreign pension income received by a Cyprus tax resident individual is taxed at a flat rate of 5% on amounts exceeding EUR 3,420 per year, or the individual may elect to be taxed at normal progressive rates - whichever is more beneficial. Most retirees choose the 5% flat rate. The EUR 3,420 annual threshold is exempt. US 401(k) and IRA distributions generally qualify as pension income under this treatment.","tax_rate":0.05,"locally_taxed":true,"treaty_protection":true}}

{"rate":0.2,"notes":"Cyprus imposes a 20% Capital Gains Tax (CGT) only on gains from the disposal of immovable property situated in Cyprus and gains from shares in companies whose value derives more than 50% from such property. Gains from disposal of shares listed on a recognized stock exchange are exempt.","details":{"tax_type":"Capital Gains Tax","country_name":"Cyprus","country_iso_code":"CYP","source_references":["PwC Worldwide Tax Summaries - Cyprus","Cyprus Tax Department","KPMG Cyprus Tax Facts"],"last_verified_date":"2026-06-03","general_description":"Cyprus CGT applies narrowly - only to gains on Cyprus-situated immovable property and unlisted shares deriving their value predominantly from such property. All other capital gains, including gains on securities, are fully exempt from CGT. Gains on shares listed on recognized exchanges are also exempt. Lifetime exemptions apply for individuals: EUR 17,086 general, EUR 25,629 for agricultural land, and EUR 85,430 on disposal of a principal private residence (subject to conditions).","corporate_capital_gains":{"rate":0.125,"tax_treatment":"Corporate capital gains on securities and most other assets are generally exempt or taxed under the 12.5% corporate income tax rate. Gains from disposal of Cyprus immovable property are subject to the 20% CGT. The 80% notional deduction on qualifying IP income applies separately."},"individual_capital_gains":{"rate":0.2,"tax_treatment":"Individuals pay 20% CGT only on gains from disposal of Cyprus immovable property and unlisted shares in companies holding such property. Gains on listed securities, foreign property, and most other assets are fully exempt. Lifetime personal exemptions reduce taxable gain."}}}

{"notes":"Dividends received by Cyprus tax residents are exempt from income tax but subject to Special Defence Contribution (SDC) at 17%. Non-domiciled Cyprus tax residents are fully exempt from SDC on dividends, making dividend income effectively tax-free for non-doms. Non-residents are also exempt from SDC. Dividends paid to non-resident shareholders carry no withholding tax in Cyprus.","rates":[{"rate":0.17,"type":"flat","notes":"SDC applies to dividends received by Cyprus-domiciled tax residents. Income tax does not apply to dividends."},{"rate":0,"type":"exempt","notes":"Non-domiciled Cyprus tax residents are fully exempt from SDC on dividends. Effective rate is 0%."},{"rate":0,"type":"withholding","notes":"No withholding tax on dividends paid by Cyprus companies to non-resident shareholders."}]}