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Retirement in North Cyprus

A warmer climate, slower pace, active lifestyle and more money in your pocket. There are many reasons why more and more people are choosing to retire in North Cyprus.

Photo: Eagles Nest Restoran - Küçük Erenköy

High quality of life

North Cyprus is a beautiful country with fine golden sandy beaches, rocky coves, forests, mountains, rich culture and delicious dishes. Beside that, , North Cyprus is a safe and secure country with low crime. This is where the world’s friendliest people live. You always feel welcome and can easily socialize with both the locals and also various international communities such as Swedes or other nationalities who live on the island.

North Cyprus generally offers a high quality of life at a lower cost than other Mediterranean countries. Here, property prices are still significantly lower than, for example, Spain and Portugal. The healthcare is world class with an impressive list of brand new hospitals, surgery and dental care, all with the latest technology available. No care queues and with staff who put you at the forefront and help you immediately so that you feel well taken care of.

Relaxed life but still active

North Cyprus also offers a really relaxed life in retirement. Here you can spend your days by the pool or the beach, working in the garden or trying out different restaurants, going on a wine tasting or a spa day. But if you want to be active at the same time, there is absolutely a lot to do and get involved in.

Volunteer work

Charities in North Cyprus are a big thing in the expat community, and there are many ways in which people can get involved. Volunteering is a major part of any charitable organisation’s activities, either by helping out to improve the environment, fundraisers or manning a charity shop. The Anglo Turkish Association (ATA) is an organization that provides cultural and social events, raises money for charities and coordinates and supports many other charity projects. There are several animal shelters that need volunteers on a regular basis, to help with feeding and walking animals. It is also a great way to meet other like-minded people and make new friends and acquaintances. It goes without saying that it would also give you a sense of doing good in the world!

Photo: CyprusScene.com

Explore the island

Another good activity is to find out everything about the island, its history, sights and places. It can take a lot of time for sure! From one side of the island to the other, there are a variety of historical landmarks and places to explore. Many people find it very fun to plan their next trip, go on day trips and really enjoy the country’s history.

There are some very active associations that often provide useful tips and information. The Foreign Residents (TFR) is a member organization to which many belong, and they meet for gatherings of all kinds and even manage to get some good discounts for their members for various services and goods!

Activities for everyone of all ages

If you have relocated to North Cyprus to start a new life and a very active from an exercise perspective then you can always join up with hiking groups, a great way to explore the island from another angle. The Five Finger mountain range running parallel with the North Cyprus coastline is stunning, with forests and beautiful walks offering some of the best views of the island that you will find. Spend some time out with a hiking group and we guarantee you will become addicted!  For those more adventurous you can also see North Cyprus on mountain bikes too or even with a horse riding school, other increasingly popular group activities these days.

Group hiking is a popular activity in North Cyprus.

Other sports that are popular are of course golf with one of the world’s best golf courses around the corner. Tennis, paddle tennis and diving which are hugely popular in North Cyprus. If you are a more adventurous type, you can try paragliding or sailing to keep your adrenaline levels high!

Diving is hugely popular in North Cyprus.

Shopping

Of course, shopping is a great pastime for many of us, and there is plenty of choice of quality shops in North Cyprus these days. From historical shopping areas and districts in the main cities, such as Bandabuliya Old Bazaar i Kyrenia or the Bedesten in Lefkosa, you can find hidden treasures as souvenirs or you can visit a modern shopping mall with all the usual brand labels. Finish off your shopping trip with lunch outside any of the wonderful historical areas and people watch.

A more fun retirement life!

If you feel more suited to a sedate life then there are book clubs and general gatherings of like-minded people all the time, and what better way to meet up with others, than at a seafront restaurant with the evening sunset. Life can be enjoyed at your own pace for sure.

There is so much more to keep you occupied in North Cyprus, whether you want to be active or not, and you need not worry about being bored on any day of the week. Life is for enjoying, whatever your preference. Concerts, festivals and art exhibitions are some things we have not even mentioned here but are fantastic to experience and discover. Simply, a more fun retirement life!

Tax rules for retirement in North Cyprus

According to Swedish law your pension income from Sweden shall be taxed by Sweden. If you retire abroad and “cut all ties” with Sweden, the tax on your pension will normally be much lower. Namely, there is a special tax in Sweden for people living abroad, so-called SINK tax, which is 25% (increased from 20% to 25% starting 1 January 2018). The requirement is that you have no significant connection and thus “cut all ties” to Sweden.

Limited taxpayer in Sweden

It is not enough to just move abroad if you want to reduce the tax on your pension. You must also make sure to follow other rules and thereby “cut ties” with Sweden. If you do this right, you will no longer have significant connection to Sweden.

If you want to be subject to limited tax liability in Sweden, you must therefore ensure that:

  • Discontinue your permanent residence in Sweden
  • Do not have a spouse or minor children left in Sweden
  • Do not sit on boards, own Swedish companies etc.
  • Do not stay too much in Sweden
  • Do not have income from renting real estate
  • Do not have income from capital

The double taxation agreement between Sweden and Cyprus

The double taxation agreement between Sweden and Cyprus regulates how the tax is to be distributed between the countries after moving to Cyprus.

NOTE: The double taxation agreement applies to both Southern and Northern Cyprus.

According to the double taxation agreement with Cyprus, pensions from Sweden are taxed as follows:

General Pension according to the Social Insurance Act.
Pension income is taxed both in Sweden (SINK) at 25% and in Cyprus. In Sweden, however, with a small deduction from the state pension of 0.77 price base amount per year. The Swedish tax is deducted from the tax paid in Cyprus. The tax will thus be 25%.

Occupational pension, public sector
Pension income is taxed only in Sweden (SINK) with 25% given that you are a Swedish citizen. Otherwise, income is taxed only in Cyprus.

Occupational pension, private sector
Pension income is taxed both in Sweden (SINK) at 25% and in Cyprus. The Swedish tax is deducted from the tax paid in Cyprus. The tax will thus be 25%.

Private pension
Pension income is taxed both in Sweden (SINK) at 25% and in Cyprus. The Swedish tax is deducted from the tax paid in Cyprus. The tax will thus be 25%.

Pension earned abroad
Income is taxed only in Cyprus at 5% after deduction of € 3,417.

NOTE: The Swedish so-called 10-year rule is reduced to seven years in the tax agreement with Cyprus.
This means that the Swedish capital tax of 30% is levied for seven years after relocation. This also applies if the shares are purchased after emigration.

More info on the Swedish Tax Agency’s website

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