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Returns under article 23 of the Income Tax Law

Circular 2016/16, which was issued by the Cyprus Tax Department on 25 November 2016, clarifies the requirements regarding returns of income received by non-residents such as sportsmen or entertainers in respect of any activities carried out in Cyprus.

Article 23 of the Income Tax Law of 2002 as amended provides that the gross income derived by any non-resident from the exercise in Cyprus of any profession or vocation, the remuneration of non-resident sportsmen or entertainers for activities carried out in Cyprus, the gross receipts of any theatrical or musical group derived from performances in Cyprus and similar incomes are subject to tax at a rate of 10 per cent.

The circular points out that the term "gross receipts" includes not only the amount paid to the individuals concerned, but also costs met on their behalf, such as accommodation and transport costs.

For tax return purposes all such costs should be disclosed, together with full supporting documentation.