Cyprus Tax Residency and Non-Dom for Individuals

As of 2017, an individual is considered a tax resident of Cyprus if they meet either the ‘183-day rule’ or the ’60-day rule’ for the tax year.

For tax years before 2017, only the ‘183-day rule’ applies to determine Cyprus tax residency.

The ‘183-day rule’ for Cyprus tax residency is met if an individual spends more than 183 days in Cyprus in any calendar year, without any additional conditions or criteria being relevant.

The ’60-day rule’ for Cyprus tax residency applies when an individual, during the relevant tax year:

• Does not stay in any other single state for more than 183 days in total.
• Is not considered a tax resident by any other state.
• Stays in Cyprus for at least 60 days.
• Has other defined ties to Cyprus.

To meet the fourth criteria, the individual must conduct business in Cyprus, be employed in Cyprus, and/or hold a directorship in a Cyprus tax-resident company at any point during the tax year, provided such activities are not terminated during the year. Additionally, the individual must maintain a permanent residential property in Cyprus that they either own or rent throughout the tax year.

For both the ‘183-day rule’ and the ’60-day rule,’ the calculation of days spent in or out of Cyprus is as follows:

• The day of departure from Cyprus is counted as a day spent outside Cyprus.
• The day of arrival in Cyprus is counted as a day spent in Cyprus.
• If arrival and departure occur on the same day, it counts as one day spent in Cyprus.
• If departure and arrival occur on the same day, it counts as one day spent outside Cyprus.

Benefits for becoming a Cyprus Tax Resident

Under both the 60-day rule and the 183-day rule for tax residency in Cyprus, residents can take advantage of the non-domiciled scheme offered by the Tax Authorities. This scheme allows eligible individuals to be exempt from tax in Cyprus on their global dividend and passive interest income.

Furthermore, any profits derived from the sale of shares, bonds, debentures, options, etc., are also exempt from taxation in Cyprus. It’s important to note that certain exceptions may apply specifically to the sale of immovable property in Cyprus.

Additionally, Cyprus tax residents who are employed in a country other than Cyprus and earn an income exceeding Euro 100,000 are eligible for a 50% income tax discount for a period of 10 years. This benefit is available as long as the individual was not a tax resident of Cyprus before their employment in the country.