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CAPITAL GAINS TAX (CGT)

Any sale of the below assets which are not taxable under Income tax, the Capital Gains Tax (CGT) is imposed on the flat rate of 20%

  • Gains on the disposal of immovable property located in the Republic of Cyprus.
  • Gains on the disposal of shares in companies owning immovable property in the Republic, excluding companies which are listed in recognized stock exchanges.
  • Gains on the disposal of shares of companies where at least 50% of their market value derives from the ownership, directly or indirectly, of immovable property located in the Republic of Cyprus.

Upon calculating the Capital Gains Tax, various deductions apply on the sale proceeds: 

  • The market value as at 1 January 1980, or cost of acquisition if occurred after 1 January 1980, adjusting for inflation.
  • The cost of any additions on the property after 01 January 1980, adjusting for inflation.
  • Any expenditure incurred wholly and exclusively for the generation of the gain, including  interest expense, transfer fees and commissions.
Exemptions:
  • Immovable property passed on or transferred on death;
  • Gifts between relatives of up to 3rd degree, as well as any gift between foster parent and foster child;
  • Gift to a company owned by the donor’s family that continue to be owned for a period of up to five years from the date of the gift;
  • Gift by a family company to its shareholders provided the property was originally acquired by the company in the form of donation. If the property is disposed within 3 years then the shareholder will not be entitled to the allowances;
  • Gift of the property to a charity, the Government or any political party;
  • Expropriations;
  • Transfer of ownership or share transfers in the event of company reorganisations;
  • Transfer of property of a missing person under administration;
  • Transfer of ownership between spouses that their marriage has been dissolved by a court order or in case of transfer of ownership between the same persons for the purpose of settling their property according to the Settlement of Property Relationships between Spouses Law; and
  • Transfer under a qualifying loan Restructuring (certain conditions apply).
Allowances (lifetime):
Description Allowance (Euro €)
Disposal of principal private residence (certain conditions apply), 85.430
Disposal of agricultural land by a farmer 25.629
Other disposals 17.086
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Our clients entrust us with the structuring of their operations in a way that incorporates the applicable tax incentives and ensures their compliance with any and all of their tax obligations and filing of their tax returns. The exceptional quality of our tax professionals is the reason why our clients select us to be their entrusted tax partners.

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