Capital Gains Tax
Capital gains tax and exemptions
Capital Gains Tax
Capital Gains Tax is imposed (where the disposal is not subject to income tax) on gains from the disposal of immovable property situated in Cyprus. This includes profits from the disposal of shares in companies which directly own such immovable property.
The Capital Gains Tax is imposed on profits from the disposal of:
- Immovable property situated in Cyprus
- Shares of private companies whose property consists of, among other things, immovable property situated in Cyprus. The disposal of shares of listed companies in the recognised stock exchange is not subject to the Capital Gain Tax Law.
- Shares of companies which either directly or indirectly participate in a company or companies, which own immovable property situated in Cyprus, and among other things, at least 50% of the market value of such shares is derived obviously from the relevant property
- A sale agreement of immovable property situated in Cyprus
The tax is imposed on the net profit from disposal at the rate of 20%. The net profit is calculated as the disposal sales proceeds less the greater of the cost or market value on 1 January 1980 adjusted for inflation. You may calculate the value adjusted for inflation by using the official Retail Price Index. The index on 1 January 1980 was 34,96 (the base year 2005).
- Gifts to relatives within the third degree of kindred
- In any case of transfer because of death
- Gifts to a company where the company’s shareholders are members of the donor’s family and the shareholders continue to be members of the family for five years after the day of the transfer
- Presents by a family company to its shareholders, provided the company acquired initially such property by gift. On this occasion, the donee must keep the property for at least three years
- Gifts to charities, government or a local authority for educational purposes
- Transfers, of course, as a result of reorganisations
- Exchange or sale by the Agricultural Land (Consolidation) Laws
- Exchange of properties where the values of the immovable properties being exchanged are equal
- Donations to political parties
|Can be deducted from the taxable capital gain||€|
Disposal of private principal residence
Disposal of agricultural land by a farmer
Any other disposal
*Exemptions are lifetime exemptions subject to an overall lifetime maximum of €85.430.