Cyprus Property – A guide to living and investing in Cyprus (Part II)

LEGAL SYSTEM

The legal system in Cyprus is modelled on the British system due to its colonial legacy. In addition, with EU membership, Cyprus has harmonised its laws and regulations in line with the acquis communautaire. In effect, this means that EU citizens can now buy more than one property in Cyprus.

The Land Registry system is one of the most advanced and reliable systems in the world, being based on the British equivalent. Purchases of property in Cyprus will be far more secure with regards to matters such as title deeds than they might be in other Mediterranean countries. All legal information regarding the legal procedures associated with purchasing property in Cyprus is available from our associate legal department.

EDUCATION

There are both Junior and Secondary School in Paphos that cater for European students, which are of a very high standard. Both the International School of Paphos and the American Academy follow the UK curriculum offering GCE “O” Levels, GCSE’s and GCE ‘A’ Levels. Boarding facilities are also available at the International School of Paphos.

Additionally, Paphos is witnessing a growth in higher education where colleges offering courses in Business Studies, Hotel Management, Accounting and other subjects have been established. Furthermore, Paphos boasts the only Environmental Studies Centre in Cyprus.

TAXATION

Cyprus has double taxation treaties with the following countries:

Austria, Belarus, Belgium, Bulgaria, Canada, China, Czech Republic, Denmark, Egypt, France, Germany, Greece, Hungary, India, Ireland, Italy, Kuwait, Malta, Mauritius, Norway, Poland, Romania, Russia, Serbia, Singapore, Slovakia, Slovenia, South Africa, Sweden, Syria, Thailand, UK, USA.

The main purpose of the treaties is the avoidance of double taxation on income earned in any of these countries. For example, citizens of the above countries can receive their pensions and investment incomes in Cyprus FREE of their home countries withholding tax. This treaty is unique to Cyprus as it includes both public and private sector pensions.

Despite recent tax reforms due to Cyprus’ accession to the EU, taxation in Cyprus is still low in comparison to other European countries. If you reside in Cyprus for more than a total of 183 days a year, you are considered a resident and you will be subject to taxation on your worldwide income as follows:

Percentage on Level of Income

Up to 19,500 Euro ........................................ nil
19,501 Euro – 28,000 Euro ............................ 20%
28,001 Euro – 36,300 Euro ............................ 25%
36,300 Euro and above ................................. 30%

Pension income from abroad will be taxed at the rate of 5% on amounts that exceed 3,417 Euro with the option to be taxed in accordance to the above scale.

For residents of the above countries, dividend and interest income received from abroad or within Cyprus is exempt of income tax.

If, however, an individual is considered to be a resident of Cyprus, dividend income is subject to a 15% defence contribution. If the dividend is received from a Cypriot company, the defence contribution is withheld at the source. If the dividend is received from abroad, the defence contribution is payable by the individual recipient.

The same rules apply to interest income except that interest income is only subject to a 10% defence contribution.

If an individual‘s total income (including interest) does not exceed 11, 960 Euro then the defence contribution on interest is charged at 3% instead of 10%. Taxes on this type of income which are paid abroad are deducted from the tax payable in Cyprus.

SAFETY

According to Interpol statistics, Cyprus’ crime rate is extremely low. Cyprus has 6% of the crime rate of the UK, 9% that of Germany, 15% that of Spain, 15% that of Ireland and 20% that of Portugal.

Source: Interpol statistics

SHOPPING

The legal tender in Cyprus as from the 1st of January 2008 is the Euro, which is divided into 100 cents.

The notes and coins currently in circulation are as follows:
Bank Notes: 5oo Euro, 200 Euro, 100 Euro, 50 Euro, 20 Euro, 10 Euro, 5 Euro.
Coins: 2 Euro, 1 Euro, 50 cent, 20 cent, 10 cent, 5 cent, 2 cent, 1 cent.
Weights and measures used are of the metric system.

Shopping in Cyprus is not characterised by the rush and strain it appears to be in other European countries. Shopping centres tend to be open and have a relaxed atmosphere making shopping casual and enjoyable, filled with friendly conversation and the offer of many a cup of delightful Cyprus coffee.

Courtesy: Leptos Estates

FOR FURTHER INFORMATION
Contact: Yianni Pavlou
Email: [email protected]
Tel: ++27 82 4944555