# self employed



## bwfcwood (Jul 23, 2012)

Hi Folks,

Just a quick enquiry...if a person is classed as self employed in Cyprus, are social security payments voluntary and are you still entitled to the same benefits as an employee? ie: healthcare?


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## Veronica (Apr 5, 2008)

If you don't pay into the social fund you will not be entitled to anything.
If you pay in then you are entitled to healthcare and other benefits.
The social insurance people will take action agaisnt anyone who works and dosn't pay into the social fund if they are caught so it is not wise not to pay.
Also the government is clamping down on anyone who works and dosnt pay taxes.


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## bwfcwood (Jul 23, 2012)

I think my question was badly phrased, I was merely wondering what the process was ie: do you register to pay contributions or is it a voluntary process.....I would expect there to be consequences for trying to buck the system!!!


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## Veronica (Apr 5, 2008)

You go to the social insurance office to register and then you have to pay each month.
I don't know what sort of business you intend to run but I would advise that you check the category you would fall into as certain trades are classed as high earning and have to pay much higher rates than others. If you are asked how much you earn €800 per month is the lowest that they will accept for assessing you.


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## davidogden (Oct 9, 2012)

veronica,
sorry to but in here but are you saying that you need to be earning around 800 amonth before you have to register as self employed, say if you were doing some form of work at home.... I know Tax is a different issue


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## Veronica (Apr 5, 2008)

davidogden said:


> veronica,
> sorry to but in here but are you saying that you need to be earning around 800 amonth before you have to register as self employed, say if you were doing some form of work at home.... I know Tax is a different issue


No it dosnt matter how little you actually earn. They base your social insurance payments on €800. It might be different if you say you only work part time though.
Business such as doctors, lawyers and others are classed as high earners and their payments are much higher.


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## mihaelaradu (Jul 26, 2011)

I was working as a part-timer through internet (translations) and I registered myself in Social Insurance office. Veronica is right, because even if I declared that my incomes are not even 500 Euro monthly, they made me pay the taxes as for the minimum accepted income of 800 Euro. You must pay every 3 months and it comes around 260- 300 Euro.
Best of luck


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## bwfcwood (Jul 23, 2012)

Thanks for the info, thats what I was looking for.


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## Will100 (Nov 14, 2012)

While I was living in Cyprus I was working for a while from home creating websites.... My advice stay away from Social Insurance and do not register a company.... the paper work and legal fees associated with the procedure are extraordinary.


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## Veronica (Apr 5, 2008)

Will100 said:


> While I was living in Cyprus I was working for a while from home creating websites.... My advice stay away from Social Insurance and do not register a company.... the paper work and legal fees associated with the procedure are extraordinary.
> 
> If anyone is interest in buying a property in Agios Tychonas
> visit my site


To advise people not to register with social is totally irresponsible. If caught working and not paying into social they could end up in jail.

As for your website, I have deleted the post in which you give the website link as it is advertising and therefore agaisnt forum rules.
If you wish to use this forum please do not advise people to break the law or try to tout for business.


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## bwfcwood (Jul 23, 2012)

Will100 said:


> While I was living in Cyprus I was working for a while from home creating websites.... My advice stay away from Social Insurance and do not register a company.... the paper work and legal fees associated with the procedure are extraordinary.
> 
> If anyone is interest in buying a property in Agios Tychonas
> visit my site


At no point in my original post did I mention setting up a company, I have no intention of doing so. Nor would I be tempted to break the laws of any country.


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## theresoon (Apr 11, 2008)

As self employed you don't have to say that you are making 800e or more a month. Best thing to do is drop by one of the local offices, explain your situation and they will tell you what to do. If of course you have a business attorney or an accountant they will advise you how you should proceed. I know a specific situation where someone starting a business had gone in and explained that they didn't really have much income yet but was planing on taking about 200e a month and that is what they were told to declare for social insurance


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## davidogden (Oct 9, 2012)

I have a number of online business ventures and it is difficult at times to work out which juridictions these fall under.

I have no objections to paying tax so long as i am making a profit

In some countries such as the USA there are in fact benefits from operating a home based business, including tax and rate reductions etc. I am not sure what the situation is in cyprus, say for someone operating a cottage based business such as traditional lace making.

From a social security standpoint I am not interested in claiming benefits and if the minimum income assement is based on 800 Euro rather than amount actually earnt this could result in negative cash flow and is perhaps a reason why someone does not register. However from what I understand the SS payments are adjusted to what one earns.

The current financial challenges means many people are looking for additional ways of earning an income and perhaps countries such as Cyprus need to start addressing these specific issues for people who want to starting working form home.

Maybe there are rules and regulations I am not yet aware of. I know Cyprus strives hard to and provides incentives for high earners and investors, but what is there for the mums and dads business?


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## Veronica (Apr 5, 2008)

davidogden said:


> From a social security standpoint I am not interested in claiming benefits and if the minimum income assement is based on 800 Euro rather than amount actually earnt this could result in negative cash flow and is perhaps a reason why someone does not register. However from what I understand the SS payments are adjusted to what one earns.


It is irrelevant whether you are interested in benefits or not, if the social insurance office learns that you are working and not paying into the social fund you are in trouble.
Also it is irrelevant how little you earn, they still base payments on 800euros and it is very difficult to get them to agree to less.
with online businesses there are probably ways to get around it as you can claim your income comes from abroad, but only if you are registered for tax in another country. If you are a full time resident in Cyprus and regsitered to pay tax here you will find it hard to escape paying social as the tax office and social insurance now talk to each other which is something they didn't used to do.


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## theresoon (Apr 11, 2008)

Also, now the Social Insurance Office is going around doing audits; changing rules to their favor - whether they make sense or not. So make sure that what you are doing is within the law -Cyprus and European law.


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## Guest (Nov 18, 2012)

davidogden said:


> I have a number of online business ventures and it is difficult at times to work out which juridictions these fall under.
> 
> I have no objections to paying tax so long as i am making a profit
> 
> ...


The problem is that Cyprus membership in EU does not allow to take to much own initiatives, it must be cleared in Brussels to not come in conflict with the EU treaty.

I have had many discussions with Cyprus Social security and Tax authorities to find out "how the land lays" before our move. Done that I support the claim that 800 € is the minimum they calculate SS on. But it is also true that it is regulated in the end when your tax return is admitted. 

The part about online business and what jurisdiction is interesting. I have tried to get an answer about what the writing in the tax laws means.

_*"An individual is liable for tax on his income as an employee and on income as a self-employed person.
Tax will be payable on income earned in Cyprus and overseas but excepting a salary received overseas by an individual who meets the test of a "permanent resident" of Cyprus."*_

For me this writing contradict it self. It really say that a Cyprus resident should pay tax in Cyprus on all income, but then it say opposite. Or perhaps it say that if you get a salary from overseas it should not be taxed in Cyprus but if you are self employed and send an invoice to an overseas client you should pay tax. Noone have been able to answer me what it mean.

An example. Someone make translation work for a company in Japan. By Japanese tax law the company has to deduct 20% of the invoice value for tax if Japan has no double tax treaty with the country where you reside, and Cyprus don't have. 
So, should you also pay tax in Cyprus or not?


Well, time will tell

Anders


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## Pandarob (Aug 2, 2012)

Vegaanders said:


> The problem is that Cyprus membership in EU does not allow to take to much own initiatives, it must be cleared in Brussels to not come in conflict with the EU treaty.
> 
> I have had many discussions with Cyprus Social security and Tax authorities to find out "how the land lays" before our move. Done that I support the claim that 800 € is the minimum they calculate SS on. But it is also true that it is regulated in the end when your tax return is admitted.
> 
> ...


i'm interested in the same question
and if that's the case, do they need pay social insurance?


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## theresoon (Apr 11, 2008)

I went to a Labor law seminar today organized by OEB. The first thing they said not to rely on the people from the Social Insurance for information. You can call OEB for all the legal information you might need.
Social Insurance payments for the self employed are calculated according to some tables they came up that say if you have shop selling.... you are making ... a month if you are a doctor you are making ... a month. then they double reference with income tax for each person to make sure.


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## Guest (Nov 20, 2012)

theresoon said:


> I went to a Labor law seminar today organized by OEB. The first thing they said not to rely on the people from the Social Insurance for information. You can call OEB for all the legal information you might need.
> Social Insurance payments for the self employed are calculated according to some tables they came up that say if you have shop selling.... you are making ... a month if you are a doctor you are making ... a month. then they double reference with income tax for each person to make sure.


For me still the question is about tax and social security payments on money earned outside Cyprus. Noone seems to be able to answer what the writing in the law means

Anders

Btw what is OEB?


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## theresoon (Apr 11, 2008)

Vegaanders said:


> For me still the question is about tax and social security payments on money earned outside Cyprus. Noone seems to be able to answer what the writing in the law means
> 
> Anders
> 
> Btw what is OEB?


OEB is the employers and industrialists federation. their website is oeb dot org dot cy. I don't see it in English but if you can locate a phone number I am sure they all speak english and are very helpful.


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## Guest (Nov 24, 2012)

theresoon said:


> OEB is the employers and industrialists federation. their website is oeb dot org dot cy. I don't see it in English but if you can locate a phone number I am sure they all speak english and are very helpful.


English version of the website

OEB


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