Cyprus Tax Residency

Cyprus Tax Residency Programme

Cyprus’ location, European Union Membership, culture, extensive network of double tax treaties and advanced infrastructure have made it a very attractive destination for individuals, their families and/or companies to relocate to.

With the correct advanced planning, those who choose to become tax resident in Cyprus are able to minimise and even eliminate tax on income. Being a non-domiciled tax resident in Cyprus also provides additional tax benefits.

Tax Residency Qualification Requirements

The 183-day Rule

In order for an individual to be considered a tax resident of Cyprus, he/she needs to be physically present in Cyprus for more that 183 days of the calendar year.

The 60-day rule

The “60 day rule” applies to individuals who meets all of the following requirements within the tax year.

They:

• reside in Cyprus for at least 60 days per annum
• do not reside in any other single state for more than 183 days
• are not tax resident in any other country
• maintain a permanent residence in Cyprus

Qualifying applicants are issued a Residency Certificate and Tax Identification Number.

Domicile or Non-Domicile

A tax resident individual will be treated as domiciled in Cyprus if they are either:

• Domiciled by origin*                                                or

• have been a Cyprus tax resident for at least 17 of the previous 20 years

*Domicile of Origin is acquired at birth and generally applies to an individual born to a Cypriot-domiciled father.

All other tax residents are deemed as Non-Domiciled

Tax Efficient Benefits

Whilst Cyprus tax residents are subject to tax in Cyprus on their worldwide income. The following tax efficient benefits apply to non-domiciled tax residents:

• Low progressive income tax rates with the first €19,500 being tax exempted
• No income tax on salaried services rendered outside Cyprus for more than 90 days in a tax year
• A 50% income tax exemption on income from Cyprus based employment, provided that income exceeds €100,000 per annum
• No tax on profits from disposal of securities, including shares, bonds, options and units in collective investment schemes
• A low corporate tax rate of 12.5% for Cyprus tax resident companies
• No income tax on dividend and interest income for 16 years
• Tax free repatriation of profits and capital
• Overseas Pensions income that exceed the amount of €3420 euro is taxed at only 5%.
• No Capital Gains Tax on assets other than immovable property situated in Cyprus
• No wealth tax
• No inheritance tax
• No gift tax