Cyprus Tax receipts up 41% in 2007

The Cyprus Inland Revenue Department reported that total tax revenue during 2007 jumped by a record 41% YoY to CYP 1.25 bln or EUR 2.13 bln compared to CYP 888.1 mln or EUR 1.5 bln in 2006 on the back of a sharp advance in revenue from capital gains taxes on property transactions.

Capital gains taxes jumped 135% YoY to CYP 273.4 mln or EUR 467.1 mln for a massive CYP 157 mln actual increase in taxation revenue as property deals surged to an all-time record as people rushed to invest in property before the imposition of VAT on land purchases.

Revenue from corporation tax was also up an impressive 38% YoY or by CYP 119.49 mln to CYP 437.8 mln or EUR 748 mln as business continued to take advantage of an improvement in the economy with the growth rate passing above 4%. Cyprus also took additional income from international companies, which registered a base in Cyprus and by paying the local 10% tax took advantage of Cyprus’ multiple double taxation avoidance treaties with many countries.

Revenue from employees was up 9% YoY or CYP 20.5 mln to CYP 238.69 mln or EUR 407.8 mln, while revenue from the self-employed was up 27% to CYP 35.6 mln or EUR 60.8 mln in 2007.

The Inland Revenue Department reported that revenue from the immovable property tax was up 17% YoY to CYP 7.3 mln or EUR 12.5 mln, while revenue from the special contribution to defence fund was up 28% or CYP 39 mln to CYP 183.9 mln or EUR 314.3 mln. This is the 10% tax imposed on bank deposits.

Stamp Duty revenue was up 47% YoY to CYP 41.1 mln for 2007 or to EUR 70.3 mln while penalties netted the government another CYP 27.1 mln or EUR 46.4 mln and other taxes another CYP 5.2 mln or EUR 9 mln.