Because freelancers are not our employees and we don't pay taxes on payouts, they must declare any income received via Solar Staff by themselves.
To carry on tax accounting in the Republic of Cyprus for your Solar Staff income, you need to:
Be a tax resident
Determine the applicable tax obligations
Tax residence
Cyprus's residents are taxed on their worldwide income, while non-residents are taxed only on certain types of income accrued or derived from sources in Cyprus.
An individual is a tax resident of Cyprus if they satisfy one of the following rules:
“The 183-day rule,” which is satisfied for individuals who spend more than 183 days in any one calendar year in Cyprus.
“The 60-day rule,” which is satisfied for individuals who, cumulatively, in the relevant tax year:
Reside in Cyprus for at least 60 days
Are not considered tax resident by any other state
Are employed in Cyprus and/or hold an office (director) of a company tax resident in Cyprus, or carry out any business in Cyprus
Maintain a permanent residential property in Cyprus that is either owned or rented by the individual
Cyprus has double taxation agreements with a number of countries (full list), the provisions of which may override the applicable tax residence rules and other provisions of national legislation.
Tax ID number
Tax Identification Code (TIC), also known as Tax Identification Number (TIN), is used by the Cyprus Tax Department in the administration of tax laws. It must be furnished on income tax returns of each individual and legal entity, as well as applications and other documents. To register, you need to submit an application and attach supporting documents. As a result, you'll be assigned a number in 99999999L format (8 digits + a capital Latin letter). Starting March 27, 2023, all new TINs begin with the digit 6, for example: 60000000A (under the TFA system). To change an existing TIN, you need to personally submit the TD 2003 form (Tax Registration/Data Amendment) to the nearest district office of the Cyprus Tax Department.
Once you get your TIN/TIC, we recommend obtaining the TAXISnet registration number for the purposes of declaring and paying taxes.
VAT ID is required for carrying out activities where VAT registration is compulsory. To register, submit the appropriate application form along with supporting documents within the specified time frames. As a result, you'll be assigned a VAT number in CY99999999L format.
Taxes and contributions payable by freelancers
In Cyprus, you can be self-employed, which means you carry on a trade or business, or are otherwise working for yourself. Self-employed persons perform works / provide services outside of regular employment and do not have employees.
IMPORTANT! Solar Staff does not have the option to choose a tax status for freelancers based in Cyprus, but you can fill in your tax ID in your account.
Individuals are liable to pay the following taxes and contributions:
Income tax (Φόρος Εισοδήματος), which is levied on taxable income and calculated in euros (€) at a progressive rate:
Chargeable income, € | Tax rate | Accumulated tax, € |
Up to 19,500 | 0% | None |
19,501–28,000 | 20% | 1,700 |
28,001–36,300 | 25% | 3,775 |
36,301–60,000 | 30% | 10,885 |
Over 60,000 | 35% | Over 10,885 |
Expenditure wholly and exclusively incurred for the generation of taxable income is deductible against the taxpayer's taxable income. Such expenditure should be supported by invoices and relevant receipts or other supporting documents. Individuals whose annual turnover exceeds €70,000 are obliged to prepare audited financial statements. For them, any tax loss incurred during a tax year is carried forward over the next five years from the end of the tax year in which the loss was incurred and set off against future profits.
Reporting needs to be submitted if annual turnover exceeds €19,500 (for amounts below that, there's no need to file an income tax return, unless otherwise stipulated). The income tax return is submitted online only (via the TAXISnet system) using the TD1 form. The deadline is July 31 of the year following the reporting year (if the annual turnover exceeds €70,000, the deadline is extended until March 31 of the second year following the reporting year or until whichever date is stipulated).
Taxpayers also need to submit Self Assessments for Individuals under the IR 158A SE form by June 30 of the year following the reporting year (or by August 1 if their annual turnover exceeds €70,000). See here for recommendations on filling out tax returns. Taxpayers with an annual turnover of over €70,000 are also required to submit audited financial statements. For these income brackets, it is recommended to register as a company to reduce the tax burden (mind that Solar Staff only support the self-employed status).
The tax is paid online via the TAXISnet system using a unique number received when filing the return. The tax must be paid in two equal parts – on July 31 and December 31 of the reporting year – based on the Temporary Tax Assessment. The final payment must be made before June 30 of the year following the reporting year (if the turnover exceeds €70,000, until August 1).
Liability for missing a return filing deadline is a €100–200 penalty, and for late payment of the tax – 5% of the unpaid amount plus penalties for each day of delay (compounded by another 5% if the delay is two or more months).
Social contributions are mandatory (the taxpayer needs to register with each fund before commencing activities) and are divided into:
Contributions to the Social Insurance Fund (SIF) in the amount of 15.6% of annual income that does not exceed €58,080. The amount of the contributions is subject to a lower and a maximum limit, depending on the profession or trade of the self-employed person. These limits are set on an annual basis (learn more). To register, you need to submit an application using the YKA 1-008 form.
Contributions to the General Health System (GHS) in the amount of 4% of annual income that does not exceed €180,000 (learn more).
Value-added tax / VAT (Φόρος Προστιθέμενης Αξίας / Φ.Π.Α.) is levied at a standard rate of 19% (there are also reduced rates of 9%, 5%, and 0% depending on the goods/services). Learn more about VAT here.
VAT registration is compulsory for taxpayers with turnover in excess of €15,600 during the 12 preceding months (according to the VAT Law). If the turnover is below that amount, the registration is voluntary (learn more).
VAT returns under Form TD 1004 are submitted online (via TAXISnet) on a quarterly basis, before the 10th day of the second month following the reporting quarter. The tax is paid within the same period. See here for recommendations on filling out tax returns. Taxpayers must also maintain accounts and issue invoices.
Liability for missed deadlines comes in the form of the following penalties: 100 euros per return for failure to submit or late submission of a VAT return, and in case of late VAT payment, 10% of the outstanding amount plus interest at 1.75% per annum.
Additional info
FAQ: Individuals / Businesses; Start your Business guide.
If income you receive via Solar Staff is denominated in a currency other than euro, it needs to be converted into euros at the ECB rate.
Income received through Solar Staff is declared based on the Offer Agreement using data from certificates and invoices.
Got questions? Contact Solar Staff support via online chat or at [email protected].