Expats in cyprus to face higher tax bills in 2013

The expat specialists say that as a result of the island’s controversial bailout agreement, expats living in Cyprus will be subject to higher tax levels.

Indeed, in recent years, expats in the country have previously enjoyed steady taxes in comparison to austerity-driven hikes in other European countries, notes Expat Forum, but rising levies and the banking crisis has seen costs climb.

The special defence contribution on ban interest is now at 30 per cent rather than 15 per cent. “If you are resident in Cyprus, you are liable to this tax on your worldwide bank interest, including that earned in offshore centres. The new rate will apply to interest received, or deemed received, or credited from 29th April onwards,” a spokesman for the specialists commented. “Your Cyprus bank should deduct the tax at source. When it comes to interest earned overseas, you need to declare it each year and pay tax accordingly.”

For those with annual income of under €12,000 interest rates remain reduced at 3 per cent. For those earning more, tax has jumped from 10 per cent before September 2011 to 30 per cent.

“This is a huge increase in a short space of time. You will now pay 200% more tax on your bank interest than you did two years ago,” added the spokesman.

Immovable Property Tax has also been updated, with every owner expected to pay tax at a minimum level of €75. The move is expected to earn €136 million for the government as they seek to raise funds to pay off their bailout and climb back from recession.