Cyprus, known for its beautiful beaches and favorable climate, also offers attractive tax benefits, particularly for those who qualify as non-domiciled individuals, commonly referred to as “non-dom.”
With clear criteria, benefits, and a streamlined process, Cyprus has become a top choice for those seeking tax residency and the benefits of non-domiciled status.
This status is particularly beneficial for individuals who are not permanent residents but qualify under the residency rules.
In this article, we discuss tax residence criteria and tax residence status, especially non-dom tax status. Here, we have explained the eligibility criteria, required documents, and the due process for applying for non-dom status in Cyprus.
If you want to get non-dom status and achieve tax benefits in Cyprus, TaxMove helps you to apply in compliance with the regulations of tax authorities in Cyprus.
Tax Residency Criteria in Cyprus
To qualify as a tax resident in Cyprus, an individual must meet the following conditions:
183-Day Rule to Become a Cyprus Tax Resident
You can become a tax resident of Cyprus by spending at least 183 days in the country during the tax year.
60-Day Rule to Become a Cyprus Tax Resident
To qualify as a tax resident in Cyprus under this rule, you need to meet these criteria:
- Stay in Cyprus for at least 60 days in the tax year.
- Have a permanent home in Cyprus, whether rented or owned.
- Spend less than 183 days in any other country during the tax year.
- Be a tax resident only in Cyprus and not in any other country.
A common method to establish tax obligations in Cyprus is by forming a private company and becoming employed through an employment contract with that company.
Tax Residency Status in Cyprus
Domicile Tax Residents
Domicile tax residents of Cyprus are taxed at rates of 17% and 30% on dividends and interests, respectively, irrespective of their income source.
Additionally, residents of Cyprus who are domiciled in the country must pay a Special Defense Contribution (SDC) on their passive income, including dividends, interest, and rental income, at designated rates.
Non-Domicile Tax Residents
Non-Dom status in Cyprus can be granted to individuals who have not resided in Cyprus for 17 out of the last 20 years before the relevant tax year. This status is typically available to individuals who have relocated to Cyprus, including native residents, and is intended for those considered domiciled outside the country.
The Non-Dom status offers substantial tax benefits by exempting non-domiciled tax residents from the Special Defense Contribution (SDC) for up to 17 years. As a result, they are not taxed on dividends, interest, or capital gains during this period, providing an attractive option for those seeking to minimize their tax liabilities.
However, they must contribute 2.65% towards the General Health System, with a maximum contribution limit of EUR 4,770, which means a total amount of dividend, interest and capital gains income of EUR 180,000.
To qualify for non-dom status, individuals must demonstrate their non-Cyprus domicile status by submitting appropriate documentation and supporting evidence.
Tax Advantages in Cyprus For All Residents
This table highlights the key tax advantages available in Cyprus, making it a favorable tax residency within the European Union.
| Tax Type | Tax Rate / Details |
|---|---|
|
Gift Tax |
0% |
|
Inheritance Tax |
0% |
|
Wealth Tax |
0% |
|
Capital Gains Tax |
0% on Crypto, stocks, and ETFs (except on real estate in Cyprus) |
|
Income Tax |
0% below €19,500 |
|
Exit Tax (Individuals) |
None |
Required Documents
If you are living or visiting Cyprus as an employee, self-employed individual, retired person, or visitor, you can apply for non-domiciled (non-dom) status to qualify for tax residency under the non-dom status in Cyprus, you need to provide several documents which may include:
- A rental agreement for your residence or property ownership certificate.
- A photocopy of your passport.
- Completed tax registration forms.
- The immigration “yellow slip.”
- Proof of social insurance payments.
- Evidence of a source of income.
- Documentation proving you were not born in Cyprus.
Procedure for Obtaining Non-Dom Status:
Obtaining non-domicile status in Cyprus involves applying to the Tax Authorities, which typically takes about three weeks once all required documents are submitted.
Application Submission:
Individuals apply for tax residency by submitting necessary documentation to the Cyprus tax authorities.
Review and Assessment:
The authorities review the application, assess residency and non-dom requirements compliance, and conduct due diligence as needed.
Issuance of Tax Residency Certificate:
Once approved, a tax residency certificate is issued, confirming the individual’s status as a tax resident of Cyprus.
Tax Planning and Compliance:
Individuals can strategically plan their taxes with a tax residency certificate under Cyprus’s tax laws. This involves filing annual tax returns and complying with applicable tax regulations to maximize benefits.
How Can We Help You?
We believe that Cyprus, along with Malta and Spain offers the most competitive special tax regime for individuals in the European Union. Thus, if you are interested in getting these benefits, TaxMove offers expert assistance in obtaining a non-dom status and Tax Residency Certificate in Cyprus.
Our dedicated team manages your application process for non-dom tax residency status, offering comprehensive support from initial consultations through application submission and ongoing compliance.
Submit the form to get tailored advice from our experts
What are the main criteria to become a tax resident in Cyprus?
To qualify as a tax resident in Cyprus, you must meet one of the following conditions:
- 183-Day Rule: Spend at least 183 days in Cyprus during the tax year.
- 60-Day Rule: Spend at least 60 days in Cyprus, have a permanent home in Cyprus, spend less than 183 days in any other country, and be a tax resident only in Cyprus.
What is the non-dom status in Cyprus?
Non-domiciled (non-dom) status in Cyprus is a tax scheme that allows non-domiciled tax residents to benefit from significant tax exemptions, particularly from the Special Defense Contribution (SDC) on dividends, interest, and rental income for 17 years.
What are the key tax rates for individuals in Cyprus?
Here are some key tax rates for individuals in Cyprus:
- Personal Income Tax: 0% up to €19,500 income, progressive rates up to 35%
- Capital Gains Tax: 0% on crypto, stocks, and ETFs; 20% on immovable property sales
- Value Added Tax (VAT): Standard rate of 19%, reduced rates of 9% and 5% for specific goods/services
- Property Transfer Tax: 3% – 8% based on property value tiers
- Stamp Duty: 0% – 0.2% based on transaction value
How does the 60-day rule for tax residency in Cyprus work?
Under the 60-day rule, you can qualify as a tax resident in Cyprus if you:
- Stay in Cyprus for at least 60 days during the tax year
- Have a permanent home in Cyprus
- Spend less than 183 days in any other country during the tax year
- Are a tax resident only in Cyprus and not in any other country
What tax advantages do non-domiciled residents enjoy in Cyprus?
Non-domiciled residents in Cyprus are exempt from the Special Defense Contribution (SDC) on dividends, interest, and rental income. They also enjoy tax benefits such as 0% inheritance tax, 0% wealth tax, and 0% capital gains tax on crypto, stocks, and ETFs (excluding real estate in Cyprus).
How long does it take to obtain non-dom status in Cyprus?
Obtaining non-domicile status in Cyprus typically takes about three weeks once all required documents are submitted to the Cyprus tax authorities.
