Cyprus is considered as being a “tax heaven” not only because it has a low income tax (the lowest in Europe) pensions are taxed at 4½% instead of 22% in say the U.K. and in addition the no inheritance tax
In Cyprus there is no inheritance tax and if one is domiciled in Cyprus (due to the double taxation agreement between Cyprus + other countries) one is exempted from such a taxation on one’s worldwide assets.
On the other hand there is an inheritance tax in most other countries and the tax rate can reach 40% and even more. This is a substantial tax and one which comes at the worst possible time, so if one of the couple dies and the other spouse has no cash to pay the taxation, it may mean that she/he, will have to sell, perhaps, the family house to pay the tax and live in rented accommodation etc etc. It is a tax at the worst moment, since in addition of one losing his partner, he has to pay on top and possible lower his standard of living.
Cyprus is considered as being a “tax heaven” not only because it has a low income tax (the lowest in Europe) pensions are taxed at 4½% instead of 22% in say the U.K. and in addition the no inheritance tax. Tax planning is needed therefore because in order for a foreign person to reap the benefits of no inheritance tax, he must prove to his own country authority, that he is domiciled in Cyprus. The word domicile is not related to the permanent resident in this context. The word domicile means that one has definitely decided to emigrate e.g. in Cyprus and live here permanently until the end of his life. He must prove that he does not intend to return to his country of origin at sometime in the future and to prove that for all intend and purposes he wishes to become “one of the locals”. It is a difficult job to persuade the original home tax authorities and we do suggest that you seek an accountant’s / tax expert’s advise.
But as an indication of whether you are (+) or not (-) domiciled in Cyprus there is a short (not by any means complete) list for the readers to check, which relates to the U.K. tax authorities. Other countries of origin may have other parameters on the questions below (+) means it is for you establishing a Cypriot domiciled and (-) not.
The process of obtaining Cypriot passports through the Cyprus citizenship-by- exemption program, grants EU citizenship for citizens from third countries.
The process of obtaining Cypriot passports through the Cyprus citizenship-by- exemption program, grants EU citizenship for citizens from third countries.
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