Stamp Duty in Cyprus

Stamp Duty in Cyprus

To conclude commercial contracts in Cyprus, for example, when buying or renting real estate, the so-called Stamp Duty must be paid. Stamp duty is also paid when signing customs declarations, issuing powers of attorney, and when concluding labor contracts. The well-known € 2 stamp on the copy of the document is exactly the confirmation of the payment of stamp duty. Stamp duty is regulated by The Stamp Law (19/1963).

The amount of stamp duty charged depends on the price of the contract:

• If the contract price is less than EUR 5000, stamp duty is not charged.
• For contract prices from EUR 5001 to EUR 170,000, stamp duty is levied in the amount of EUR 1.5 per thousand of the contract price.
• If the contract price exceeds EUR 170,001, Stamp Duty is charged in the amount of EUR 2 for each EUR1000 of the contract price.

The maximum size of Stamp Duty is EUR 20,000.

In order to pay Stamp Duty, you need to buy and stick ordinary postage stamps, which can be purchased at any post office in Cyprus or in a special store at the tax authority. Until recently, the payment of stamp duty took place in most cases exclusively with the participation of the tax authorities. A new procedure has been in effect since July 2020.

For documents with a fixed amount of stamp duty (copies of contracts, certificates, powers of attorney, wills, and other documents), stamps are purchased independently at the post office or from another authorized person in the amount corresponding to the type of document, pasted on the document and crossed out with two oblique lines. Next is the date of payment of the fee, the signature of the payer. If the formalities are not complied with, the stamp duty is considered unpaid.

The calculation of the amount of stamp duty

The calculation of the amount of stamp duty is now carried out by the payer independently. To do this, the payer of the fee must use a special calculator prepared by the tax department. The calculator contains information about the type of contract, its size, date of signing, date of payment of the duty, as well as information about the payer, including TIC (tax number). As a result, the calculator will give a final calculation, on the basis of which the fee is paid. The further procedure depends on the amount of the stamp duty payable. If the amount of stamp duty does not exceed EUR 100, then the tax is paid independently. To do this, the payer is obliged to send to the tax office by e-mail the document obtained as a result of calculating the amount of the duty on the calculator. IRS has not currently published a dedicated email address for such notifications, the IRS main address is hq@tax.mof.gov.cy. After that, the procedure for paying the fee is similar to paying the fee for documents with a fixed fee. If the amount of stamp duty calculated on the calculator exceeds EUR 100, then the payer is obliged to print out the calculation and apply with it and the document for which the fee must be paid to the tax office, where the inspector will carry out the necessary procedures.

Terms of payment of stamp duty

It is important that stamp duty must be paid within 30 calendar days from the date of issue of the document. In case of violation of the term (but not more than 6 months), a fine of 100% of the amount of the fee is imposed. If the fee is paid 6 months after the date of the document, the fine is two fees. Fines are paid at the tax office, self-payment of fines is not possible.

Every effort has been made to ensure the accuracy of this publication at the time it was written. It is not intended to provide legal advice or suggest a guaranteed outcome as individual situations will differ and the law may have changed since publication. Readers considering legal action should consult with an experienced lawyer to understand current laws and how they may affect a case. For specific technical or legal advice on the information provided and related topics, please contact the author.