Changes on Tax Rates 2014 – Accounting Services in Cyprus

Certain changes on tax rates are applicable since January 2014. These changes were voted during 2013 from the House of Representatives in order to boost public finances due to the economic crisis and following agreement with Troika.

The summary of changes is analysed below:

1. Social Insurance Rate: 

Employees: This increases since January 2014 from 6,8% to 7,8% for both employees and employer. The employer will deduct the 7,8% of employees contribution from their gross salaries and pay them the net amount.

The social insurances together with the rest of the employers contributions (social cohesion, industrial training, redundancy fund) are payable by the end of the month following the month of contributions.

Self-Employed: This increases from 12,6% to 14,6% on their net earnings.

The social insurance of self-employed is payable on a quarterly basis (Jan. – March, April – June, July – Sept. and Oct. – Dec.) within 40 days following the end of each quarter.

2. Special Contribution on salaries:

The progressive gross monthly scales are reduced by Eur 1.000 from those applicable in 2013 starting from January 2014. The amended scales are as follows:

Euro                                       Rate of deduction

0 – 1.500                                              0%

1.501 – 2.500                                      2,5%

2.501 – 3.500                                      3%

Over 3.501                                          3,5%

Minimum contribution of Eur 10 is payable to the authorities.

The special contribution is shared equally by the employee and the employer and is payable by the end of the month following the month of contribution.

3. VAT rates:

The rates increase since 13th of January 2014 as follows:

a. Standard Rate increases from 18% to 19%.

b. Reduced Rate of 8% increases to 9%. This reduced rate is applicable mainly to catering and hotel accommodation services.

c. The reduced rate of 5% is not affected. This rate is applicable to pharmaceutical products, foodstuffs, hairdressing services, newspapers, books and magazines e.t.c.

4. Consumption tax on fuel:

 This increases by 5 cents per litre.

 

Please feel free to contact our office should you need any additional information.

 

 

Author

Olesya Chrysanthou ACCA

CPV Corporate Services Limited

 

Managing Director