TAXATION: at best it provokes whispered grumbles and at worst. well you can imagine. EU accession legislation has filled many column inches in the last year, so keeping track is difficult. Recent changes to the taxation system come into force at the beginning of the New Year, and these changes will affect the income of the island’s large expatriate community.
With all the changes, OFS WorldNet Ltd sponsored a seminar entitled ‘Personal Wealth-Health Check Up’, along with PricewaterhouseCoopers (PwC) to address the concerns of expatriates living in Cyprus. Judging by the turnout of over 250 people, the number concerned at how the changes will affect them is high. Indeed, Ene Glykys of OFS Worldnet said yesterday, “Speaking to the other service providers who attended, they all agreed that it was the largest gathering they have been to.”
Represented at the seminar were Scottish Widows International, who offered advice on setting up trusts to protect assets, and Pearson International, who discussed property as an investment as well as international mortgages. Lighthouse Financial offered pointers on safe investments in a volatile market, while PwC focused on regulatory issues and taxation.
The advice on taxation was presented by Cleo Papadopoulou. The presentation started with double tax treaties (DTT) that Cyprus has signed with 32 countries (including the UK), which specify the place of taxation or each type of income to avoid double taxation, and how to claim double tax relief when it is paid in both countries.
Papadopoulou also focused on the introduction of the term ‘residence’ in taxation changes and how people would be declared residents of Cyprus if they spent more than 183 days in the tax year. The significance of this definition is that residents of Cyprus can be taxed on their worldwide income, while those who fall beyond the definition will be taxed only on income arising in Cyprus.
The change in definition is highly significant, as it affects pensions, dividends, interest payments received and rental income. Pension income in excess of £2,000 p.a. will be taxed at five per cent. Dividends received will remain exempt from income tax, but those who fall into the category of resident will be subject to a 15 per cent defence contribution, payable at source if received in Cyprus or by the individual recipient if received from abroad. The same will be applied to all interest income, although the defence contribution there is levied at 10 per cent. Rental income is also subject to a three per cent defence contribution for any property situated in Cyprus.
The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.
