Capital gains tax in Cyprus

Capital gains tax in Cyprus 2017-12-29T10:57:23+00:00

Capital gains is taxed at 20% on gains but gain on disposal of securities is completely exempt. Gains on disposal of property situated outside Cyprus is also exempt from any taxation.

The gains that are subject to capital gains tax are gains of any person (individual or company) accruing on a disposal of chargeable property.

The Taxable gain is the result of the difference between sale proceeds and the original cost of property plus improvements cost. The total cost of property should be adjusted to include increase from the date of acquisition that took place not earlier that 1/1/1980, to the date of disposal. Increase can be estimated through the Cyprus consumer price index.

  • Except Disposals
  • Gifts or donations among relatives. The relation must be up to 3rd degree.
  • Donations to approve charitable organizations and the Government.
  • Exchange of sale of land according with Agricultural law.
  • Exchange of properties. The gain made on this exchange is used to acquire another property. That gain is deducted from the cost of new property and its non taxable.
  • Gifts to family companies. This is exempt only if the shareholders of the company are and continue to be members of the donor’s family for at least five years.
  • Gifts from family companies to their shareholders. The company must purchase the property from the first place, by the way of gift in order for the except to be valid. In addition if the shareholder disposes the property by the company throughout the next three years from the gift date the exception will not be valid.
  • Expropriations.
  • Transfer by reason of organization.