Cyprus is unique when it comes to the taxation aspects of living on the island. Cyprus has double taxation treaties with: Austria, Bulgaria, Canada, China, Czech Republic and Slovakia, Denmark, France, Germany, Greece, Hungary, Ireland, Italy, Kuwait. Norway. Poland. Romania, Russia, Sweden. UK, USA and Yugoslavia.

Furthermore there are negotiations for the ramification of treaties with Egypt, Malta, Syria, Belgium, Finland and the countries comprising the Commonwealth of Independent States. The main purpose of these treaties is the avoidance of double taxation of income earned in any of these countries.

The remittance system compares extremely favorably with the tax system used in many other countries including popular sunspots like Spain. Recent tax reforms sharply reduce the tax burden and foreign residents are now taxed on a flat basis of 5% per-annum on pension income over £2000.

There is 0% on investment income (i.e. dividends & interest) brought into Cyprus. In special circumstances exemptions totaling up to CYP 4,000 per person or CYP 8,000 per married couple may apply.

Consequently, the total tax burden on alien residents is in practice often only 3%. This compares extremely favorably with competing destinations where property owners are subject to high tax exposure levels of up to 60%.

Insurance pensions can be paid to retirees in Cyprus on a similar tax-free basis, and are index-linked by virtue of the Reciprocal Agreement, compared to their "frozen" status in other overseas destinations.

For comparisons in Europe click on to ''tax comparisons''.