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Cyprus Tax – Benefits in Kind

The Tax Department (“TD”) has published an Informative Guide which explains the tax treatment of certain benefits offered by employers to employees and persons who hold or are deemed to hold an office. The Informative Guide provides clear guidelines as to the proper valuation of the benefits in kind, for the purpose of consistency, clarity and uniformity, clearing any ambiguities.

In addition, the TD issued Circular 32 and Circular 37 both of which provide additional information on the documentation to be held and how the benefits in kind are calculated.

The taxation of benefits is provided in Article 5 of the Income Tax Law, according to which benefits from any office or employment, provided to an employee or to a member of his family either in cash or otherwise, are subject to tax.

The guide describes how the TD intends to apply the law as from 1 January 2019. Nevertheless, the subject provisions may be applied for previous years as well.