KPMG CY | KPMG | CY

Cyprus Tax Residency and Non-Dom Rules

Cyprus Tax Residency and Non-Dom Rules

This publication provides an overview of the reformed Cyprus tax residency rules for individuals, as well as an outline of the main tax advantages and concessions available to non-domiciled individuals and expatriates

1000

Related content

freeway-and-road-ramps

With a strategic geographical location in the middle of three continents, Cyprus is the third largest island in the Mediterranean Sea and the natural gateway to the Middle East. A sovereign European country with more than 30 years of experience as an international business center that is supported by a modern and investor friendly EU compliant tax system, a solid, impartial and credible legal system and a welcoming attitude, Cyprus is naturally the ideal hub for business and trade.

This publication provides an overview of the reformed Cyprus tax residency rules for individuals, as well as an outline of the main tax advantages and concessions available to non-domiciled individuals and expatriates. The key elements of this brochure are outlined below, however for the full details you may refer to the full brochure, or contact us directly for any specific queries or services required.

Tax Residency:

  • The 183 days rule

Cyprus has adopted a residency-based system of taxation, whereby physical presence in Cyprus exceeding 183 days in a tax year (1st January to 31st December) will constitute tax residency for individuals.

  • The 60 days rule

An individual who does not stay in any other country, for one or more periods exceeding in aggregate 183 days in the same tax year and is not tax resident in any other country for the same year, may be deemed as a resident of Cyprus in that tax year, by only staying in Cyprus for 60 days. Further conditions are included in the full brochure.

Non-Domiciled Rules:

An individual who is a tax resident of Cyprus under the provisions of the Income Tax Law, but is “non- domiciled”  in the Republic of Cyprus, will be exempt from Special Defence Contribution (SDC). Therefore, tax residents but non-domiciled individuals will enjoy dividend, interest and rental income free from SDC tax in Cyprus.

Exemptions regarding employment income:

Individuals who were based overseas and who were not Cyprus tax-residents before the commencement of their employment in Cyprus, may be entitled to one (but not both simultaneously) of the following exemptions:

  • The 50% exemption rule

Individuals who take up employment in Cyprus with an annual income in excess of €100.000 will be eligible for an exemption from taxation of 50% of their income for a period of 10 years, commencing from the year of employment.

  • The 20% exemption rule

Individuals who take up employment in Cyprus and were not tax resident in Cyprus prior to commencing such employment, will be eligible for an exemption from taxation of 20% of their income or €8.550 (whichever is lower) from any employment which is exercised in Cyprus. 

Connect with us

 

Request for proposal

 

Submit