Taxation of rental income in Cyprus: innovations

Renting out a home in Cyprus is a pretty popular business. It is a resort country where tourists from all over the world come all year round. For accommodation, they can choose a hotel or hotel, or give preference to an apartment or a villa rented from a private owner. Since the latter option is more affordable, many visitors choose it, which creates unhealthy competition for the hotel business. But most of all, until recently, the government worried about the fact that private owners who rent out housing do not pay tax, while they are actually doing business in the country.

In this regard, the authorities in Cyprus have decided to oblige all landlords to pay a tax levy. Only those objects are not subject to taxation, the annual income from which is less than 15.6 thousand euros.

Features of the new taxation system

In addition to paying taxes, this system implies the licensing of housing that will be rented out. Now this procedure is handled by a special service - the Cyprus Tourism Organization. To obtain a license, every potential landlord must:

• provide a decent level of comfort for tourists who will live in the selected house or apartment;
• strictly comply with all the requirements and taxation duties of housing, which is rented by private owners in the country.

Such a procedure is carried out not only at the licensing stage, but also after it. It is necessary to assess the extent to which the owner of the object monitors the conditions in which the visitors live. If the results are unsatisfactory, the landlord may lose the license. Such inspections are carried out by the country's tax administration. Also, its task is to calculate tax on rental income.