Cyprus Tax Residency
An individual is considered a Cyprus tax resident if they meet either of the following:
- 183-day rule: If an individual is physically present in Cyprus for more than 183 days in a tax year, he will be considered a tax resident of Cyprus in that tax year.
- 60-day rule: If an individual who does not stay in another country for one or more periods exceeding in aggregate 183 days in the same tax year is deemed as a resident in Cyprus in that tax year, if all of the following conditions are met:
- the individual stays in Cyprus for at least 60 days in the tax year
- do not stay in another State for over 183 days
- exercises a business in Cyprus and/or is employed in Cyprus and/or holds an office in a Cyprus tax resident company at any time during the tax year
- maintains (by owning or leasing) a permanent home in Cyprus
Non-Domicile (Non-Dom) Status
Individuals who are tax residents in Cyprus but do not have a Cyprus domicile, are exempt from Special Defence Contribution (SDC) tax on:
- Dividends
- Interest
In essence, an individual who relocates their tax residency to Cyprus may benefit from a significant tax advantage of the exemption from Special Defence Contribution (SDC) on dividend and interest income for a period of up to 17 years, subject to meeting the applicable non-domicile conditions.
Dividends and interest received is subject 2,65% General Healthcare System Contributions (GESY, GHS), which is payable also by persons benefiting from the Cyprus Non-Dom Tax Status.
Any income which is subject to GHS is capped at €180.000 per year, resulting in a maximum annual amount of contribution of €4.770, i.e. annual dividends and interest received above the threshold is not subject to the contribution.
Tax Exemption for Employment Income
An individual can benefit from exemption on his/her gross employment income, either 20% or 50% upon relocation to Cyprus, subject to meeting the applicable conditions.
How can we help
At FINCAP Advisers Ltd, our dedicated tax team offers comprehensive services, including:
- Corporate and international tax advisory
- Personal tax planning and compliance
We combine technical expertise with practical solutions to help clients navigate the evolving tax landscape efficiently and confidently.
Should you like to further discuss the content and potential impact of the above to your business, please contact our trusted advisors from the Tax Department.
