Can anyone give me advice about tax please. I live permanently in Cyprus and know about the Double Taxation Agreement with the UK. I want to pay my tax in Cyprus but dont know how to go about it. I have read the literature from the UK Inland Revenue and its as clear as mud. Has anyone actually gone through the process who can help me, please.
I have just been through all this and it is quite simple. I knew nothing about the tax agreement and assumed that no longer living in the UK I was not liable for tax. WRONG!! Download the relevant tax form from the UK tax site and fill it in. Then go to the local tax office here and obtain forms for each year you have been living here. Fill them in and submit them to the local tax office and you will then receive notification from UK that you will no longer be getting tax demands from them. Needless to say the British Gestapo aka HM Customs and Revenue will not advise you of any of this but just send you demands and fines if you do not follow the above procedures. They found out my address here and threatened me with court action here if I did not pay them. Now they accept I do not have to pay anything. Who says the UK is not a police state?
Couldn't let this one go after DUNCANs caustic comment.Before we left the UK last year I did a bit of research and took advice from someone who had gone before me.
1.Get in touch with the Tax Office responsible for your tax file -my ex employers told me where and gave me a phone number. Ask the tax office for your UNIQUE tax reference number.It will be something like 392/A4567.
2.Go online to www.hmrc.gov.uk/contactus/staustellform.htm and ask for a form P85 which is an "INCOME TAX CLAIM when you have left or are about to leave the UK. Or,you can ring the same people on 00 44 8459 000 604
3.Complete that form and return it to your own tax office.
4.In due course you will receive a form from The Centre For Non Residents in Nottingham.It is called a FORM DT/INDIVIDUAL and will be accompanied by notes to help you complete it.
Part D regarding UK income tax taken off payments already received -there will probably not be enough space on the form so just put in there "see attached sheet" and do the necessary on a sheet of lined fulscap.
5Take the form DT/Individual to the Inland Revenue Office in Paralimni -its in the block directly opposite the Town Hall-together with the documents they ask for.
I found the staff in there very helpful.They will give you a couple of local forms to fill in which are quite simple.If you are not sure ask the girl in the office to help.
She wouldn't let me submit the forms until we had lived in Cyprus for six months.
I am told that it takes about six months after submission of the documents to Paralimni for 'the system' to catch up.
In February 2008 I look forward to receiving a juicy cheque fromUK Inland Rev.
I have opted to go for the Cyprus option of first 2000 pounds tax free and 5% Cyprus income tax on the remainder.Your second option is the first 10000 tax free and 30% Cyprus Income tax on the remainder.
I will be keeping some of my inland rev.cheque to use to settle my first Cyprus Tax demand.
In conclusion I believe that if Duncan had read up on Double Taxation he wouldn't have felt he had had a raw deal.
Hope this helps.Oh Yes -keep copies of everything!!!!
PS.The Cyprus authorities will stamp your form and return it to the Centre for Non Residents who will calculate what you will be repaid.
You have to live in Cyprus for more than 183 days to apply for the above.
Thanks for all that info. You have made it sound very simple! Its been something I have been meaning to get round to for a year or so now and your advice has given me the impetus to get on with it.
I have been in the process of paying tax in Cyprus for about 9 months now and have filled in the tax return online. Without going into it too much, I believe that the option that pensioners have is as you say 200cy and 5% whereas the option that both pensioners and eveybody else has is 10000cy and 20%. Also for those that have their interest taxed at source, they can fill form R105 and take it to their bank or building society to get interest gross. This should be Cyprus defence tax as against UK 20%
I have had my tax return for 2006 accepted by Cyprus Inland Revenue and am waiting to pay. This will be a lot less than the UK. I have already had my cheque from the UK
Anyone wishing to fill in tax returns online this is the website http://taxisnet.mof.gov.cy
Complete the form and get yourself a CYP 1.00 Revenue Stamp from your local Post Office.
Take the form, together with your residents permit, passport, pension details, and the stamp to your local Inland Revenue office.
They will check the form, stamp and sign it - and return it to the UK Inland Revenue. It takes the people in the UK about 6 months to process it, but eventually you will receive your pensions without the deduction of UK tax.
I took out part of another pension earlier this year and went through the process.
(f you'd like me to email you a blank form to complete, drop me a pm with your email address and I'll send it to you).
Back on line for the next 3 weeks while we are 'visiting' the UK for Xmas and New Year (No phone line yet at the house in Frenaros).
I also want to be taxed in Cyprus rather than the UK and the question I need answered is 'Do you have to have your pension (Company not State as I'm only 60) paid directly into a Cyprus bank account or can it be paid, as it currently is, into my UK bank account, and then only have a proportion of it transfered to Cyprus?' I see on the form that one of the questions is 'Do you remit ALL your income to your foreign account?' (or something like that.)
(Anyone here old enough to remember "The Shadows" )
Louise recommended me an accountant. If like me anything to do with money and taxes just baffles you maybe its sometimes worth just paying someone to sit down and talk to you for a couple of hours on your options until you understand it all.
I 'm self employed and will still be doing that when I move over ( flying back for the odd job and doing some work from Cyprus but paid from England) I really dont know whats best to do..Do I just continue to get paid into my english account and pay taxes here or do i get paid in euros into a cyprus account and pay taxes in Cyprus as that will be my main home. Its all a big headache to me and id just love someone to make the options clear. I know its costs money everytime I do a transfer to my Cyprus bank so logic tells me the euro payment option is best but who knows!!!
We went through this process nearly two years ago. The Larnaca tax office were excellent and made it all very simple - even gave us a mobile tel. no. in case we had any other queries. (We called in first to see how to do it and then went back with the relevant documents.)
As said above, it took six months to get the tax rebate from the UK. Our UK pension is still paid into our UK bank account and we just bring monies across as/when we need. The form you sign confirms you will pay income tax to Cyprus on your worldwide income - whether or not you bring it into Cyprus or not.
When we went to register, the form we were asked to sign was actually for the 12 months before we came here. They explained that was the only form they were concerned with at that time - the form to cover when we moved here would be posted out to us at the relevant time. We asked for a basic idea as to when we would need to pay our first lot of tax here and all she said was "Cyprus is not for worry... maybe 2008 or 2009 or even later" (bear in mind that was in 2006). Whether they will issue us with a statement showing we owe a nil balance re. the first form we signed or not, I have no idea but we haven't been asked for any money as yet.
"Cyprus is not for worry"
PS: If you're retired they even calculate for you which system it's best for YOU to opt for i.e. the graded or flat 5%
It has taken 9mths.since submission of the documents to Paralimni tax office but last week I got my first dollop of refund with the promise of the balance at beginning of April.
When I get that I will open another account at BoC and deposit what I think Cyprus Inland Rev.will demand at "sometime"in the future.At least it will be there to be paid straight away.
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