CyprusLiving

Methinks you should speak to a good accountant.
As informative and helpful people on this forum strive to be, you will probably get differing opinions and hear of different experiences.

Hi. Not rocket science. If you have Alien Registration (yellow slip) take that and passport to your local inland revenue office. (look online or telephone book for address) Tell them you want to register for tax in Cyprus, they will tell you what to do. you will be given a Tax I.D. number. When you are registered you can contact HMRC and request overpayment refund . Not sure you will be able to claim anything for past years if you were only registered in U.K. We registered in Cyprus 2009 and claimed back from HMRC on 2 separate forms only this year. Forms 2009-10 and 2010-11. Hope this helps.

It really is very simple , no need for accountants.
Do as the post above says call into your nearest Tax Office and ask.
I received Uk Tax rebates for the 4 years I was on island but had not gone for NT under UK Tax system.

Perhaps someone will post about the time scale for a new resident to declare themselves a Cypriot taxpayer. I believe it is 6 months but am not sure. So be prepared to make that statement.....

If you spend over 183 days in the ROC within a tax year (Jan1 to Dec 31), you are required to register for income tax. At the same time, you can deregister from UK tax (if you have been paying it there). The tax regime in Cyprus is advantageous so you should do it at your earliest opportunity.

To me it seems that Boycott has been here more than 6 months. So, what if any penalty is there for not having paid the required taxes here in Cyprus.

Trev..

The fines increased last year to €100 for not submitting a tax form on time. So although the tax liability may be nil, there may be a fine for not submitting a nil return. This may not be applicable for first time registration but you will only find out by registering unfortunately.

Jeanne

We didn't realise we had to register for tax in 2007 as our annual income was way under €19,500. We found a great accountant in Kissonerga who sorted it all out between HMRC and the Paphos Tax Office. Not only did we not have to pay any fines for the years we hadn't completed Tax forms in Cyprus, but she also managed to get a refund from HMRC.

So I would suggest that if you don't have a background in tax affairs, it may be worth your while getting an accountant to act on your behalf. Our accountant charges €45 a year and all we have to do is drop off the paperwork and her fee in February each year and she does the rest!.

Nil return to the Tax Man.... I completed my tax return last year and took it (by hand) into the tax office and they refused to accept it as there was no tax to pay. Nil returns are not required. Even when I created a fuss and insisted they accept the tax form they refused, having telephoned someone up, and then told me to go away, and then served someone else.
No problem.
I popped it into a letter box and changed my copy at home to detail the story.
There are an lot of people in Cyprus who do not complete a tax return.

And yet until you do submit a tax return, how is it known by the tax people if you are over or under €19,500??

Trev..

I agree, NIL Returns are not required.

Alan

I am now confused as every year since I have personally been doing my tax return I have submitted a nil return which has been accepted.- but it may be that BOC does take a minimal amount of defence tax which is also declared!!

If you receive an income from overseas eg UK State Pension, even though it is less than the €19,500 Cyprus personal tax allowance, it is necessary to complete and submit a Cyprus Tax Return.

One of us receives a UK State Pension and didn't register with the Tax Office in Paphos in 2007 and suddenly HMRC sent letters and different PAYE codes and finally demanded an outrageous sum of money. So we went to two accountants and both said that because the source of income was from overseas it was necessary to submit an annual tax return in Cyprus OR pay tax to HMRC on the UK pension. All this happened January - March 2012 and now any official letters from UK state NT in the tax code box.

amber,

I fail to understand how HMRC suddenly sent you letters and a different PAYE Code because unless and until you register for Income Tax here (having spent more than 183 days here), they would make the assumption that you would pay any Income Tax in the UK i.e.PAYE. Indeed how would they know you were resident here and desired to pay your tax on any worldwide income here.

In any case even though you told them you were resident here they would not issue a NT (No Tax) Certificate until they had documented proof of you being registered for tax here (on your worldwide income). You would need to fill out a form (used to be called a DT Individual) and have the Income Tax Dept here verify (and charge you about €80 for the triangular stamp to append to the document) that you are registered here for tax purposes. HMRC then issue you with a NT Certificate, actually they inform your particular tax office, then your pension is gross i.e. no Income Tax or NI deductions.

Mick

We have lived in Paphos permanently since 2004 and notified the tax authorities in the UK and Cyprus that we had made this move. In fact we notified every authority and kept copies of all the correspondence (this has been useful on other occasions). A PAYE code letter has been sent to our address in Cyprus annually ever since 2004. There was no source of income from the UK until it came the time to claim the UK State Pension in 2007.

It was only in September 2011 that HMRC sent 4 different PAYE code notifications within 3 weeks and wanted to claim an amount of tax for the previous tax years (2007 - 2011) that we went to the two accountants for advice. I described what happened then in an earlier comment. Yes, €80 was paid for the Dual Taxation Treaty and we duly received a letter from HMRC with a NT tax code. We paid the accountant €160 for preparing and submitting each of the Cyprus tax Returns for 2007/8/9/10 and since then she has charged €45 per annum.

Using an accountant not only saved us a lot of worry and speeded up the process, but she also managed to get a refund from HMRC of £156.48.

Amber, forgive my ignorance on the subject but if you were resident in Cyprus since 2004 then under the rules of the dual tax treaty you should have not been liable for any more UK tax. Although you started to claim a UK pension in 2007, it was my understanding that you still would not be liable for any UK tax as you elected to pay it in Cyprus and the UK should have paid the pension to you in Cyprus without deducting any tax.
You mention that you have gone to accountants to sort it out but surely this is a relatively simple matter in that after 2004 you owed no more tax to the UK. Is it a case that you did not feel confident in dealing with this issue yourself and thats why you used accountants or is the issue so difficult that the avarage person needs to use accountants and the issue is far more complex than I imagine ?

Brookside - thank you for your concern, but I do not have any further comment to add as I feel that I have already shared a lot of personal information with CL Forum (and members of the public worldwide).

Amber, many thanks for your defensive reply but there was no need because my question was not a criticism of you. My question was aimed at trying to find out how complex an issue it was trying to become a tax resident in Cyprus.It was my understanding that it was a relatively straight forward issue but when you mentioned using accountants then I was merely questioning my understanding of the issue. I was trying to find out if in your case, if you simply wanted the issue sorted quickly and with little fuss and were prepared to pay for this service or if the whole issue was complex enough to justify employing an accountant to do it for you.
I would be grateful if someone would comment further if they have managed to sort out this issue for themselves and if the process was difficult or not.

Brookside - I did not feel that I was being defensive, or that you were criticising me in any way, but I whilst I like to be able to help people by giving them an account of what has happened to us, I am wary of putting too much information on the www.

We got nowhere with HMRC between September 2011 and January 2012 when we were receiving all the PAYE Code letters (eg letters not answered and talking to a different person each time we rang HMRC) hence the visit and subsequent action by the accountant who resolved the issue less than 4 weeks later.

It is not necessary for us to have an accountant now, but as we are not necessarily in Cyprus at the time of year when tax returns are due, we shall continue to use her services.

Amber I can appreciate that it may have been difficult when dealing with the HMRC.There is nothing wrong with using accountants like you have done but I suppose you just have to be determined when dealing with the tax office and although it can be hassle, If you record times, dates and names of who you spoke to then it makes it a lot easier when trying to resolve the issue at a later date. I myself have recently had the runaround from them but recorded all the times I contacted them and what was said and by who. I then used their complaints procedure and because I had the facts recorded, the issue was resolved very quickly afterwards.

Hopefully the comments people are making on this topic will help other CL Members - at the end of the day, it depends on an individual's choice and the complexity of the matter whether or not an accountant is needed. My reasons for using an accountant are well documented and I am happy with the outcome.

Do not think you need an accountant if your funds are lower than the €19.500, and it certainly pays to have any tax stopped here as the UK is very high, one of the few perks financial of living here to be honest! why you would chose to pay tax in the UK if your a Cyprus resident I do not understand, and you do not need a Cypriot account to sort the very easy tax forms out, I mean why pay them for that service?, I just hand them to the wife, bless her...

I have read all of your post during day to day running of CL, but honestly I have no idea of your circumstances as these are your personal information and members should really not be involved with.

Has anyone received a tax form for the tax year 2013 yet? Maybe I'm starting to loose it but am sure I'd been sent one in previous years by this time of year.

Chris

My understanding is that it is not just about a Nil Tax Return if your income is under €19,500. What if you have dividends or receive some interest income from the UK or anywhere else, or rent income.
These are all taxed individually here, & not everybody living in Cyprus may understand that.
I encountered major issues with HMRC when we moved here, & after two Accountancy Practices, both completely usless & costly, I thankfully found the lady in Kissonerga who was & remains brilliant.
Huge tax refund from UK plus refund of over stopped Defence Tax by Cyprus banks, which was stopped at the higher going rate, but reclaimed as I was only eligable to pay it at the lower rate.
From what I understand it can take years to receive a refund from the Cyprus Tax Office, but it didn´t using Kissonerga girl.
If anybody would like her details feel free to PM me, I would be delighted to pass them on.

Chris...


Over the last 10 years we have received the annual tax return forms later and later!
For 2013 we have not yet received them, they are apparently being sent out this week.
You would have thought that with the country in such an economic mess they would have got on with it much sooner, like
say in last December, in order to maximize revenue flow.
Geoff.

We moved here in 2008 and registered for Cyprus Tax from 1st Jan 2009. We have filled our returns in here every year but until recently had only had one nil assessment from them for 2008! All should be a nil assessment for tax but we did not realise until last year that we had to pay defence tax on our rental income from our house in the UK and also on our interest from any UK savings and dividends. We knew it was payable on our savings interest here but that was taken at source. Fortunately all these were declared on our tax return. I went to our local tax office last June and was told the assessments would arrive soon but that they were concentrating on the larger ones first. He suggested I wait until my assessment arrived. Eventually, having heard nothing further, I went in and said that I did not want to get too far behind and asked if I could pay. The girl said I could order them to be sent and asked how many years I wanted and suggested I did 2 or 3 first. Last week I got the assessments (mine only) for 3 years income tax (nil) and 3 years defence tax (over €500) which has to be paid in a month to avoid interest. No interest was charged for not sending in a defence tax return (which should be done every 6 months) as I had declared everything on my tax return.

Defence tax on our rent income was taxed at 3% (on rental income - 25%) on our savings interest at 10% and on dividend interest at 15%. The defence tax on savings interest has gone up to 30% sometime last year.

So be careful if you have rental property or UK savings as these should be declared for defence tax. I have since calculated our total bill for the 5 years and it comes to nearly €2000 on our small income so how much more could the Government have in their bank if they got up to date with all the unpaid taxes and title deed money?

I also know someone who was told they did not have to fill in a return if their income was below the €19500 so I asked at the tax office when I took my next return in if I needed to keep filling them in and she said once you are in the system then you have to continue filling them in so maybe honesty isn't the best policy even if you sleep better as a result of it!

There are some interesting comments here. An important observation I feel it that the title to this thread is not strictly factual in that you do not have a choice, legally, with respect to where you are 'tax resident'. If you spend 183 days or more in Cyprus in a calendar year, you are resident here for tax purposes.
We all have a legal requirement to register with the tax authorities where we are 'tax resident'.

It is possible to be tax resident in more than one place - then things get potentially complicated. You can also have foreign sourced income that is liable to tax in your country of residence and the country of source. In these cases, unless there is a double taxation treaty, you can find yourself paying tax twice.

On example is UK rental income on property that has been let & the owners are resident in Cyprus. In this case you should sign up to the non-resident landlord scheme. Fortunately there is a very comprehensive double taxation treaty in place between Cyprus and the UK.

In the vast majority of cases, you are likely to be better off paying your tax liabilities in Cyprus.

If anyone has specific questions, please send a pm.

All the best

There are some interesting comments here. An important observation I feel it that the title to this thread is not strictly factual in that you do not have a choice, legally, with respect to where you are 'tax resident'. If you spend 183 days or more in Cyprus in a calendar year, you are resident here for tax purposes.
We all have a legal requirement to register with the tax authorities where we are 'tax resident'.

It is possible to be tax resident in more than one place - then things get potentially complicated. You can also have foreign sourced income that is liable to tax in your country of residence and the country of source. In these cases, unless there is a double taxation treaty, you can find yourself paying tax twice.

On example is UK rental income on property that has been let & the owners are resident in Cyprus. In this case you should sign up to the non-resident landlord scheme. Fortunately there is a very comprehensive double taxation treaty in place between Cyprus and the UK.

In the vast majority of cases, you are likely to be better off paying your tax liabilities in Cyprus.

If anyone has specific questions, please send a pm.

All the best

Received my 2013 Tax Return form today. Completed forms to be returned by 30 April 2014.

Re the question who has to complete a Return? Answer; it would appear to be everyone!

The Instructions accompanying Form I.R.1A employee 2013 states, "Tax computation - The completion of part 'Tax computation' is compulsory, irrespective of the amount of income and the amount of tax due....."

Also if you think you are due a refund, note that the IR no longer issue cheques.

I got mine today as well. Any idea of the conversion rate?

I*t is usually posted on a notice board in the Tax office entrance hall. I will be looking on Wednesday

Trev..

Thanks Trev,I thought someone might already have seen it. I may call in today & check, if so will let you know.

I keep a record of the interbank exchange rate on the date my pension is paid & in
2013 the average Foreign Xchange rate was 1.1755 Euro to 1 GBP

I don't know what the Tax Office use, but the above is the one I'll be using.

I checked with the local tax office this morning. The exchange rate to be used for 2013 tax returns here is 1.20 (£>€).
Geoff.