Tax Legislation

As of 1 January 2003, Cyprus conforms to EU requirements and fully complies with the OECD initiative against harmful tax practices. Cyprus accession to the European Union was on 1st May 2004.
In Cyprus, proposed tax legislation is drafted by the Ministry of finance and then introduced to the Council of Ministers for approval. Following their approval it is then submitted to the House of Representatives where once approved the proposed tax legislation is enacted. Retroactive legislation is not permitted.
Tax laws become effective on the dates specified in the law. The following are the principal taxes:

1. Taxes on income and gains:

• Personal income tax
• Corporation tax
• Special contribution for defence
• Deemed dividend distribution
• Double taxation treaties
• Tax diary
• Capital gains tax

2. Taxes on property:

• Immovable property tax
• Immovable property transfer fees
• Estate duty

3. Taxes on transactions:

• Value added tax
• Stamp duty
• Capital duty
• Customs duties and excise taxes
• Motor vehicle taxes
• Inheritance tax

4. Other taxes:

• Social insurance contributions
• Business license tax
• Municipal taxes

Case law and Judicial review

Taxpayers who do not agree with the Commissioner of the Inland Revenue on the amount of tax payable after an assessment may protest by the end of the month following the date the assessment is raised. Appeals heard and examined by the Commissioner and a final decision is taken. If aggrieved by the decision, the taxpayer may appeal to the Supreme Court. As a result of appeals, a considerable body of case law has built up relating to the interpretation of the tax statutes.