Cyprus Tax Residency Requirements
To be considered a tax resident of Cyprus, an individual must:
- Not residing in any other country for more than 183 days in aggregate within the tax year.
- Not be a tax resident in any other country.
- Reside in Cyprus for at least 60 days and have ties to Cyprus, such as a contract of employment or being a director of a Cyprus resident company.
The 60-Day Rule allows individuals to become non-dom tax residents by staying in Cyprus for at least 60 days per year, provided they do not become tax residents of any other country. This Rule is particularly beneficial for those who wish to enjoy Cyprus’s tax advantages without committing to a longer stay.
Benefits of Cyprus Non-Dom Tax Status
Non-domiciled tax residents in Cyprus enjoy several significant tax benefits:
- No tax liability on dividend income: Income from dividends, whether from Cyprus or any other country, is exempt from tax for non-domiciled residents.
- No tax liability on interest income: Interest income from any source is also exempt from tax for 17 years.
- No tax on income from the disposal of securities: Capital gains from selling shares, bonds, and similar financial instruments are not taxable in Cyprus.
- Rental income benefits: Rental income is subject to income tax only after a 20% discount.
Income Tax Table – 50% Deduction
Salaried Tax Scale | Tax Rate | Tax Scale on €100.000 with 50% Deduction |
|---|---|---|
€ up to 19.500 | 0 % | 0 € |
€ 19.501 – 28.000 | 20 % | € 1.700 |
€ 28.001 – 36.300 | 25 % | € 2.075 |
€ 36.301 – 60.000 | 30 % | € 4.110 |
Total Tax | € 7.885 | |
Cyprus Non-Dom Status
An individual is eligible for the Cyprus Non-Domiciled Status if they are a tax resident of Cyprus and have not been a tax resident of Cyprus for 20 consecutive years before the law’s introduction on 16 July 2015. This status offers a 50% tax deduction on income for individuals with annual remuneration exceeding €55,000, provided they were not tax residents of Cyprus before their employment. This deduction applies to income derived from Cyprus and is valid for 17 years from the start of employment.
Special Defense Contribution (SDC) Tax
While tax residents with Cypriot domicile status must pay specific tax rates on certain incomes, non-domiciled tax residents are exempt from these obligations. The SDC tax rates for domiciled residents are:
- 17% on dividend income
- 30% on interest income (3% for corporate and Cypriot government bonds)
- 2.25% on rental income
Conclusion
The Cyprus Non-Domicile Tax Status offers a range of tax benefits, making it an attractive option for individuals seeking to optimize their tax situation. By meeting the residency requirements and leveraging the 60-day Rule, individuals can enjoy significant tax exemptions on dividends, interest, and more. For those interested in obtaining Cyprus non-dom tax residency, our experienced tax advisors can guide you through the entire process to secure your Tax Residency Certificate.
For further assistance, contact our tax department to learn how you can benefit from the Cyprus Non-Dom Tax Status.
