According to the Law, individuals working in Cyprus may deduct from their taxable income up to 1/6 of the salary. How to do so? First part of this deduction is about social insurance contributions. Those contributions are obligatory for every individual in Cyprus. The second and most interesting part of this deduction is about provident funds and life savings accounts. For instance, your annual income €is 48,000. When opening your own savings account with InsuranceLF, you’ll get about €1,200 back from payable income tax.

It depends on your chargeable income. For example, you work in Cyprus and your annual salary is €48,000. That means you pay almost €4,000 to social insurance fund, and your income tax is about €8,000 per year. How to pay less income tax? Open your savings account, combine it with life insurance and get back up to 30% of your income tax.

Savings account that includes life insurance coverage is the best way to reduce your income tax up to 30%, make a good investment and protect you from financial risks. Savings accounts combined with life insurance are not subject to check. No authority or government organization can place restrictions on that kind of deposit or confiscate it.

The money you deposit on your savings account is placed in a number of qualified investments such as government bonds, units of mutual funds, etc. All you need is to decide the level of interest you want to earn. For example, your annual salary is €48,000. In 6 years, you’ll have about €30,000 in your life savings account and save more than €7,000 on taxes.

Apart of tax deduction benefit, you’ll earn interest on your savings deposit. The interest rate depends on the level of risks you are willing to take when choosing the fund to invest. Our professional financial advisors help you to make the best choice.

To get your tax benefit in full, it’s better to keep deposit for 5-6 years. After 24 months the owner of a savings account has the option to withdraw some amount of money.

Income tax is the tax that government impose on financial income generated by all entities within their jurisdiction. By law, businesses and individuals must file an income tax return every year to determine whether they owe any taxes or are eligible for a tax refund.

Which income will be taxed in Cyprus? If you spend in the country more than 183 days in any one calendar year, you are a tax resident in Cyprus and pay tax on your worldwide income there.

According to the current legislation, Cyprus residents contribute 7.8% of their salaries to social insurance fund. If your salary is €48,000 per year, you contribute about €4,000 per year to the social insurance fund.

Every employee in Cyprus is compulsorily insured under the Social Insurance Scheme. Every such person is obliged to pay contributions to the social insurance fund in order to get the following benefits: marriage; maternity and funeral grants; maternity allowance; sickness and unemployment benefits, invalidity; invalidity, old-age, widow and orphan’s benefit; employment injury benefits, etc.

The easiest way is to use our free income tax calculator. How to do so? Enter your annual gross income, and your income tax will be shown immediately along with your personal tax allowance. But keep in mind, there is no income tax for the annual income under €19,500. If you earn more than that, work out your own tax deduction on our website for free and use the right pay less income tax.