Cypriot personal tax system

[sunspot]

Other countries ask you to report your taxable income annually. However, in Cyprus, dividends/interest income must be reported immediately on receipt and GESY tax paid, otherwise you are charged a penalty if you wait till the tax return is officially due.

That at least is my understanding.

My question concerns pension income. Does the same thing apply? Must you report it immediately as soon as you receive it (on the MOF website and pay the tax) or can you wait till your tax return is officially due for that year? If you wait, are you charged a penalty?

Many expats here use tax advisers to file their returns. I certainly understand why, but would prefer to do them myself if I can. Thank you.

[souniman]

pension payments are filled in on your tax return they do not have to be declared immediately

[jeba]

Are foreign pensions even taxable in Cyprus? German pensions at least aren't, because they're taxed in Germany according to the agreement for thr avoidance of double taxation.

[sunspot]

If you are tax resident here, your pension can be taxed at only 5%. If there is a double taxation agreement between Cyprus and Germany, then Germany should not tax you, as long as Germany agrees you are not tax resident there. That is how it works with the UK.

Thanks to souniman for the earlier reply.

[jeba]

If you are tax resident here, your pension can be taxed at only 5%. If there is a double taxation agreement between Cyprus and Germany, then Germany should not tax you, as long as Germany agrees you are not tax resident there. That is how it works with the UK.

Thanks to souniman for the earlier reply.

According to what I was told by my German accountant, Germany reserves the right to tax German pensions in all agreements for the avoidance of double taxation. Hence, I'm surprised that this isn't the same for UK pensioners.

[mark4007]

If you are tax resident here, your pension can be taxed at only 5%. If there is a double taxation agreement between Cyprus and Germany, then Germany should not tax you, as long as Germany agrees you are not tax resident there. That is how it works with the UK.

Thanks to souniman for the earlier reply.

If only life was that simple.. If you are going to be getting a UK goverment pension (say as an ex teacher or police) you might want to get some advice as to how you will be taxed in the future in the UK even if you are resident only in Cyprus..

[sunspot]

If you are tax resident here, your pension can be taxed at only 5%. If there is a double taxation agreement between Cyprus and Germany, then Germany should not tax you, as long as Germany agrees you are not tax resident there. That is how it works with the UK.

Thanks to souniman for the earlier reply.

If only life was that simple.. If you are going to be getting a UK goverment pension (say as an ex teacher or police) you might want to get some advice as to how you will be taxed in the future in the UK even if you are resident only in Cyprus..

Yes, ex-government employees are in a different position when they start receiving their pension. I was referring to the normal state pension you had to contribute to, even when you worked in the private sector.

[galexinda]

If you only receive the UK state pension then the total amount January - December of the previous year is included in the annual tax return.

[mark4007]

If you are tax resident here, your pension can be taxed at only 5%. If there is a double taxation agreement between Cyprus and Germany, then Germany should not tax you, as long as Germany agrees you are not tax resident there. That is how it works with the UK.

Thanks to souniman for the earlier reply.

If only life was that simple.. If you are going to be getting a UK goverment pension (say as an ex teacher or police) you might want to get some advice as to how you will be taxed in the future in the UK even if you are resident only in Cyprus..

Yes, ex-government employees are in a different position when they start receiving their pension. I was referring to the normal state pension you had to contribute to, even when you worked in the private sector.

so to be clear.. if you are a cypriot resident, (I take it you agree that) UK pensions may or may not be taxed in the UK...

[sunspot]

If only life was that simple.. If you are going to be getting a UK goverment pension (say as an ex teacher or police) you might want to get some advice as to how you will be taxed in the future in the UK even if you are resident only in Cyprus..

Yes, ex-government employees are in a different position when they start receiving their pension. I was referring to the normal state pension you had to contribute to, even when you worked in the private sector.

so to be clear.. if you are a cypriot resident, (I take it you agree that) UK pensions may or may not be taxed in the UK...

I do not know the rules applying to UK pensions of ex-government employees. Can only comment on ex-private sector employees who are drawing the standard state or private pension to which they contributed during their working life. For them, as I understand it, you can apply to be taxed only in Cyprus if you are tax resident here. There is a double taxation agreement between the 2 countries. Of course, HMRC has to approve your application.

[mark4007]

Yes, ex-government employees are in a different position when they start receiving their pension. I was referring to the normal state pension you had to contribute to, even when you worked in the private sector.

so to be clear.. if you are a cypriot resident, (I take it you agree that) UK pensions may or may not be taxed in the UK...

I do not know the rules applying to UK pensions of ex-government employees. Can only comment on ex-private sector employees who are drawing the standard state or private pension to which they contributed during their working life. For them, as I understand it, you can apply to be taxed only in Cyprus if you are tax resident here. There is a double taxation agreement between the 2 countries. Of course, HMRC has to approve your application.

Really.. so why make sweeping generalisations about the uk cyprus DTA and the german cyprus DTA on the subject of pensions..

And as for the "application to be taxed only in Cyprus if you are tax resident here".. perhaps you can enlighten us all as to where we can accesss info on this "application"... and the mechanics of applying to HMRC to approve the application for the tacation of UK standard state or private pension.

[sunspot]

URL re Cypriot tax on foreign pensions:

https://gcpaudit.net/index.php/cyprus-a ... -planning/

There are many other sites with this info.

The following is my understanding and experience and that is all.

Download HRMC’s DT form and guidance notes:

https://www.gov.uk/government/publicati ... individual

Complete the form. Take it to your Cyprus tax office.

They will stamp it, charge you a fee, and return the form to you.

Post the form to HMRC in the UK. Await reply.

Souniman and galexinda answered my question, thank you.

Jeba asked about Germany. I replied citing UK tax regs as example. I specified: ‘That is how it works with the UK.’ Wish I had not replied.

Will not contribute to this thread again. Sarcasm is unpleasant. Apologies for causing offense.

[souniman]

Well said Sunspot sarcasm it the lowest from of wit

[daveg]

Absolutely correct Sunspot, completed the necessary forms and sent back to UK couple of years ago....now my private pensions are taxed here in Cyprus...
My wife's Teachers pension remains taxable in the UK..

[galexinda]

As my income is under the UK personal tax threshold I did not have to complete the DT forms when I transferred my tax status to the Cyprus system.
When I notified my UK bank that I was now resident in Cyprus it posted me a form requesting my Cyprus tax code in case I ever received interest so any interest would not be taxed at source in the UK.

[galexinda]

Sunspot, I can appreciate your frustration, but that is why it is best to ask an accountant for individual professional advice rather than on social media.
It is a complicated topic at the best of times with different rules for different situations with some areas changing every year.
I could complete my annual tax return but my accountant has been extremely helpful over the past four years or so and I consider her fees money well spent.

I have also found links similar to this helpful:
https://www.pwc.com.cy/en/publications/ ... g-2024.pdf

[mark4007]

URL re Cypriot tax on foreign pensions:

https://gcpaudit.net/index.php/cyprus-a ... -planning/

There are many other sites with this info.

The following is my understanding and experience and that is all.

Download HRMC’s DT form and guidance notes:

https://www.gov.uk/government/publicati ... individual

Complete the form. Take it to your Cyprus tax office.

They will stamp it, charge you a fee, and return the form to you.

Post the form to HMRC in the UK. Await reply.

Souniman and galexinda answered my question, thank you.

Jeba asked about Germany. I replied citing UK tax regs as example. I specified: ‘That is how it works with the UK.’ Wish I had not replied.

Will not contribute to this thread again. Sarcasm is unpleasant. Apologies for causing offense.

For clarity

The link provided is not an "application to be taxed only in Cyprus if you are tax resident here"

it is an application for UK tax not to be deducted at source (or for a repayment of such tax) on certain sources of income.