Amendments to the definition of tax resident for individuals

Definition of tax resident for individuals

As of January 1st, 2017, the Cyprus Income Tax Law is amended with regards to the definition of “resident of the Republic” for individuals. The amendment shall also have effect on other tax laws, to the extent where such laws refer to Cyprus tax resident individuals as these are defined in the Cyprus Income Tax Law.

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Definition

Under the provisions of the Cyprus Income Tax Law, the term "resident of the Republic", when applied to an individual, means an individual who stays in the Republic for a period or periods exceeding in aggregate 183 days in the tax year.

 

Conditions

The definition has been amended to also provide that, 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, is deemed as a resident in the Republic in that tax year, if all of the following conditions are met:

(i) the individual stays in the Republic for at least 60 days in the tax year,

(ii) exercises any business in the Republic and/or is employed in the Republic
and/or holds an office with a Cyprus tax resident person at any time during the tax year,

(iii) maintains (by owning or leasing) a permanent home in the Republic.

The law is further amended to clarify that an individual that cumulatively meets
all the above conditions shall not be treated as a Cyprus tax resident in the
tax year if, during that year the exercise of any kind of business in the Republic and/or employment in the Republic and/or holding of an office with a
tax resident person in the Republic is terminated.

The new provisions shall become applicable from tax year 2017 onwards with the publication of the amending law in the Official Gazette which is expected to
take place on Friday, July 21st 2017. 

© 2017 KPMG Limited, a Cyprus limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative ("KPMG International") a Swiss entity. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG International Cooperative ("KPMG International") or KPMG member firms.

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