Worldwide Tax Summaries--CYPRUS(1999-2000)(part2)

Worldwide Tax Summaries--CYPRUS(1999-2000)(part2)

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INDIVIDUAL TAXES

SIGNIFICANT DEVELOPENTS
There have been on significant tax or regulatory developments in the last year.

TERRITORIALITY AND RESIDENCE
In general, Cyprus income tax is imposed on income accrued, or received in Cyprus.

GROSS INCOME
Employee gross income/An alien employee is taxed in Cyprus on all remuneration derived from or received in Cyprus, including
benefits-in-kind, such as free accommodation.

An employee is not taxed on reimbursements for travel and entertainment expenses.

Capital gains and investment income /Capital gains other than those from immovable property are not taxed in Cyprus. A 20% tax is imposed on gains arising from the disposal of immovable property in Cyprus or the disposal of shares of companies, other than pubic, that own immovable property. In the case of disposal of company shares, the gain is calculated exclusively on the basis of the gain from the immovable property. The value of the immovable property will be its market value at the time the shares were sold.

The taxable gain is the difference between the sale proceeds and the original cost of the property plus improvements as adjusted for inflation up to the date of disposal on the basis of the consumer price index in Cyprus. In the case of property acquired before January 1, 1980 the original cost is deemed to be the value of the property as at January 1,1980 on the basis of the general valuation conducted by the Land Registry Office under the Immovable Property Law.

Foreign investment income remitted to Cyprus to an individual who is not a citizen of Cyprus and is not a permanent resident is taxed only to the extent it exceeds C£2,000, at excess over C£2,000 is taxed separately at a fixed rate of 5%.

Cyprus-source investment income is taxed in the normal way ,subject to deductions of C£600 for interest on bank deposits (together with debenture interest received from a public company) and C£1,200 for dividends from public companies. Interest receivable from Cyprus government securities, Government Savings Certificates and deposits to
Housing Finance Corporation is totally exempt from tax , without any limitation.

DEDUCTIONS
Business deductions/In general, any business-related expense (including contributions to trade unions or other professional bodies and professional tax) is deductible, unless reimbursed. Expenses of traveling to and from work are not deductible unless the employee lives in a village involving a return trip to work of at least 30 kilometers, in which case the bus fare actually paid is deductible.

Nonbusiness expense/Subject to limitations, interest on housing loans, other interest, rent, charitable contributions, soCIAl security contributions, and insurance premiums are deductible.

In addition, subject to certain restrictions,30% of the amount paid by individual to acquire first-issue shares floated on the Cyprus Stock Exchange is tax deductible.

Personal allowances/Al residents are allowed a tax deduction of C5£00 for each child under 16 or receiving secondary education or serving in the National Guard and C£1,500 with a maximum tax benefit of C£300 for each child receiving higher education. A C£500 spouse deduction is also available. These allowances are apportioned between spouses according to
their income.

Persons over 65 years of age are allowed a tax deduction of C£1,500,with maximum tax benefit of C£300.

TAX CREDITS
Either through double taxation treaty or Cyprus unilateral relief, residents with foreign-source income are entitled to a credit equal to the income tax levied on that income in the foreign country. This credit cannot the Cyprus income tax imposed on the same income.

SpeCIAl grants/The following three categories of grants are exempt from income tax.

1. A grant of up to C£1,500 per academic year granted to families that have a child receiving higher education abroad.
2. An annual grant of C£40 for each child granted to families with many children.
3. An annual grant to families of C£200 for every blind child under 18 years of age.

OTHER TAXES
Social security taxes/For 1999 the taxpayer's of soCIAl security taxes is 6.3% of the first C£18,924 of salary.

Other taxes on income/Professional tax is imposed by municipal authorities on the income of salaried persons. The tax is based on a graduated scale, and the maximum tax is C£220.50 (on salaries in excess of C£30,000). The tax is deductible in determining taxable income for income tax purposes.
A contribution of 3% for the Defense of Cyprus is also imposed on salaries and pensions (pensions of up to C£3,000 are exempt )under a law that will be in force up to June 30, 1999but may be extended for a further period by the House of Representatives. This contribution is not deductible in determining taxable income for income tax purposes.

TAX ADMINISTRATION
Returns/Husbands and wives cannot file joint returns. Separate returns must be filed on a calendar-year basis.

Payment of tax/There is income tax withholding from salaries under the pay-as-you-earn system(PAYE). If a taxpayer has other income not subject to withholding, payments of estimated tax must be made in three equal installments on August 1, September 30and December 31.

TAX RATEX
The following table lists the normal rates of taxation applicable to individuals.
                            NORMAL
              TAXABLE INCOME       TAX ON     PERCENTAGE
OVER    NOT OVER                   COLUMN1   ON EXCESS
(COLUMN1)
       0        C£5,000……………………-        -
C£   5,000        8,000                -    20
      8,000       11,000……………………C£600    30
      11,000…………………………………… 1,500    40

Note:
Foreign employees of international business entities ( i,e .,entities exclusively owned by aliens and deriving their income from activities carried on exclusively outside Cyprus) are entitled to the following tax advantages.
1. An international business entity's foreign employees providing their services in Cyprus are liable to Cyprus income tax at reduced rates equal to one-half of the normal Cyprus tax rates.
2. An international business entity's foreign employees working outside Cyprus are liable to Cyprus income tax at reduced rates equal to one-tenth of the normal Cyprus tax rates. Such employees are, however, totally exempt from tax if they receive their salary in or through Cyprus.
3. An international business entity's foreign employees are fully exempt from soCIAl insurance and defense contributions.

INDIVIDUAL TAX CALCULATION
Calendar year 1999

ASSUMPTIONS
Resident husband and wife; two children, both receiving full-time education in secondary schools in Cyprus; one spouse earns all the income.

TAX COMPUTATION
Salary……………………………………………………………C £42,000
Interest remitted to Cyprus on foreign investments……………3,500
Bank deposit and public company debenture interest …………900
Dividends from public companies………………………………2,100
Interest on Cyprus government securities and…………………2,000
Government Savings Certificates  
Capital gains……………………………………………………2,000
Total gross income………………………………………………52,500
Less-Itemized deductions:
Interest on foreign investments remitted to Cyprus…………3,500
Interest on bank deposits and public company debentures…600
Dividends from public companies…………………………1,200
Interest on Cyprus government securities and Government
Savings Certificates……………………………………………2,000
30% of amount spent to acquire public company………800
first-issue shares
Professional tax…………………………………………220
Housing loan interest……………………………………500
Other interest expense……………………………………100
Charitable contributions…………………………………300
Subscriptions……………………………………………880     12,100
Net income………………………………………………………………40,400
Less-Personal allowances:
Deduction for children-C£500×2………………………1,000
Deduction for spouse………………………………………500
SoCIAl security contributions………………………………1,192      2,692
Taxable income…………………………………………………………C £37,708
Income tax thereon (see table above) …………………………………C£ 12,183
Add-5%tax on excess of interest on foreign investments remitted
to Cyprus over 2,000,i.e.,5%on 1,500…………………………………………75
Less-Foreign tax on foreign investment interest higher than 75;
restricted to 75………………………………………………………………(75)
Income tax liability……………………………………………………C£ 12,183

Notes:
    1. The income tax liability as calculated is discharged partly by withholding at source and partly by direct tax payments.
    2. Exchange rate of the Cyprus pound at December 31, 1998:US$1=C£0.4992

      

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北京中立诚会计师事务所简介下载
地 址:北京朝阳区北苑路13号领地OFFICE大厦B座7层701室
电 话:(010)- 52086638 51095615
传 真:(010)- 52086636
邮 编:100107
E-mail:supercpa@163.com