Annual Capital Allowances for Cyprus Companies and Cyprus entities

The annual capital allowances for Cyprus businesses known as wear and tear allowances (As approved by the Cyprus tax department), are calculated on the acquisition cost of the fixed assets as follows:

Fixed Assets% of capital allowances
Buildings (Note 1) 
Industrial, agricultural, and hotel4
Metallic frame of greenhouses10
Timber frame of greenhouses331/3
Machinery and equipment (Note 2) 
Plant and machinery10
Furniture and fittings10
Agricultural machinery and tools15
Computers & Computer hardware20
Intellectual Property – 5 years20
Motor vehicles other than saloon cars20
Forklifts, tractors, excavators, bulldozers, oil tanks, and loading vehicles25
New commercial vessels8
New passenger vessels6
Sailing vessels4.5
Steamers, tugs, and fishing vessels6
Motor launches12.5
Second-hand commercial and passenger vesselsover its remaining useful life
Loose tools331/3
Videotapes of video clubs50
Application software 
Over €1.709331/3
Up to €1.709100
Wind generators10%
Photovoltaic systems10%
New airplanes and helicopters8%


1. Industrial and hotel buildings acquired during the years 2012-2018 (inclusive) are eligible to Cyprus capital allowances /Cyprus tax depreciation at the rate of 7% per annum. For acquisitions after 1/1/2019 the Cyprus capital allowance /tax depreciation will be 4%.

2. Plant and machinery acquired during the years 2012-2018 (inclusive) are eligible to Cyprus capital allowances /Cyprus tax depreciation at the rate of 20% (excluding such assets which are already eligible for a higher annual tax rate of tax depreciation). For acquisitions after 1/1/2019 the Cyprus capital allowances /Cyprus tax depreciation will be 10%.

3. Any expenditure of a capital nature incurred for the development or acquisition of intangible assets may be claimed as a tax deduction and will be claimed on a straight-line basis in the tax year which it was incurred and the immediate four following years

4. Rates are amended in the case of second-hand buildings

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