Cyprus is not only known for its stunning beaches and warm climate but also for its attractive tax system. Cyprus taxes are designed to benefit both individuals and businesses, offering competitive rates and special regimes like the Non-Domiciled (Non-Dom) tax status.
As one of the most tax-friendly destinations in Europe, Cyprus offers expatriates 0% tax on dividends, interest, and certain capital gains—making it an ideal choice for international professionals and entrepreneurs.
What is Cyprus Non-Domiciled Status?
The Cyprus Non-Dom tax regime is designed to attract high-net-worth individuals and expatriates by exempting them from key taxes, such as the Special Defense Contribution (SDC) on dividends, interest, and capital gains.
This means substantial tax savings compared to other European countries with higher taxation rates.
Key Benefits of Cyprus Non-Dom Tax Residency
0% tax on dividends, interest, and capital gains (except on real estate located in Cyprus) for up to 17 years.
No inheritance tax, wealth tax, or gift tax, making Cyprus an attractive jurisdiction for estate planning.
Low corporate tax rate of 12.5%, one of the most competitive in the EU, ideal for business owners and startups.
Legal tax residency under either the 183-day or 60-day rule.
EU-compliant tax system, ensuring transparency and financial security
Cyprus Tax System: Rates & Benefits for Expats
The Cyprus taxation system classifies residents into two categories: Domiciled Tax Residents and Non-Domiciled Tax Residents, which determine how income is taxed.
Domiciled Tax Residents
Individuals born in Cyprus or those residing for 17 out of the last 20 years.
Subject to 17% tax on dividends and 30% tax on interest.
Must pay Special Defense Contribution (SDC) on passive income, including rental income and interest.
Non-Domiciled Tax Residents (Most Attractive for Expats & Investors)
- Available to individuals who haven’t resided in Cyprus for 17 out of the last 20 years.
- 0% tax on dividends, interest, and capital gains (except Cyprus real estate).
- Exempt from Special Defense Contribution (SDC).
- Required to contribute 2.65% to the General Health System (GHS) on passive income, with a cap of €4,770 annually.
| Tax Type | Tax Rate / Details |
|---|---|
|
Income Tax |
0% below €19,500 |
|
Dividends & Interest |
0% (Non-Dom Residents) |
|
Capital Gains Tax |
0% on Crypto, stocks, and ETFs (except on real estate in Cyprus) |
|
Gift Tax |
0% |
|
Inheritance Tax |
0% |
|
Wealth Tax |
0% |
|
Exit Tax (Individuals) |
None |
|
Corporate Tax Rate |
12.5% (Standard), 2.5% (IP Box Regime) |
Other Tax Advantages of Cyprus
Low Corporate Tax Rate: 12.5%
Cyprus has a corporate tax rate of just 12.5%, making it one of the lowest in the EU. This is particularly beneficial for entrepreneurs, startups, and international businesses looking for a tax-efficient jurisdiction to establish their company.
IP Box Regime: Corporate Tax as Low as 2.5%
The Intellectual Property (IP) Box Regime allows qualifying companies to benefit from an effective tax rate of just 2.5% on income generated from intellectual property rights (such as patents, software, and trademarks).
This makes Cyprus one of the most tax-efficient locations in Europe for technology companies, innovators, and businesses relying on IP assets.
How to Qualify for Cyprus Tax Residency: Key Requirements
To become a tax resident in Cyprus, individuals must meet one of the following residency criteria:
Option 1: 183-Day Tax Residency Rule
- Spend at least 183 days in Cyprus within a tax year.
Option 2: 60-Day Tax Residency Rule
- Stay in Cyprus for at least 60 days within a tax year.
- Maintain a permanent home in Cyprus (owned or rented).
- Spend less than 183 days in any other country.
- Be employed, self-employed, or operate a company registered in Cyprus.
- Not be a tax resident of any other country.
Many expatriates choose to open a company in Cyprus to establish tax residency under the 60-day rule and take advantage of the Non-Dom tax regime.
How to Apply for Non-Dom Status in Cyprus
To obtain Non-Dom tax residency, individuals must complete a straightforward process with the Cyprus Tax Authorities:
Step-by-Step Application Process
Submit Application – Provide necessary documents to tax authorities.
Compliance Review – Authorities assess residency and non-dom eligibility.
Receive Tax Residency Certificate – Once approved, official tax resident status is granted.
Tax Planning & Compliance – File annual tax returns and comply with Cyprus tax laws.
Required Documents
- Proof of residence (rental agreement or property ownership certificate).
- Valid passport copy.
- Tax registration forms.
- Immigration “Yellow Slip” (if applicable).
- Proof of employment or self-employment in Cyprus.
- Evidence that you were not born in Cyprus (to prove non-domiciled status).
Take the Next Step To Become a Tax Resident in Cyprus
Whether you want to obtain Non-Dom tax residency, set up a company in Cyprus, or have experts analyze your situation to find the best tax structure for you, we can help.
We have assisted thousands of expatriates in relocating their tax residency and optimizing their business structures for maximum tax efficiency.
Click here to claim your free initial consultation or fill out the form below to speak with one of our tax experts today.
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What is Cyprus Non-Domiciled Status and who qualifies?
Cyprus Non-Domiciled (Non-Dom) status is a special tax regime that allows expatriates to benefit from 0% tax on dividends, interest, and certain capital gains for up to 17 years. To qualify, you must:
- Not have been a Cyprus tax resident for at least 17 of the last 20 years.
- Become a tax resident under the 183-day or 60-day rule.
- Have a permanent home in Cyprus (rented or owned).
What are the tax benefits of Cyprus Non-Dom status?
- 0% tax on dividends, interest, and capital gains (except Cyprus real estate).
- No inheritance tax, wealth tax, or gift tax.
- One of the lowest corporate tax rates in Europe (12.5%).
- Legal tax residency with either the 183-day or 60-day rule.
How do I become a tax resident in Cyprus?
There are two ways:
- 183-Day Rule → Stay in Cyprus for at least 183 days per year.
- 60-Day Rule → Stay at least 60 days, have a permanent home, be employed/self-employed in Cyprus, and not be a tax resident elsewhere.
Do Non-Dom residents need to pay any taxes in Cyprus?
Non-Dom tax residents are exempt from SDC tax (Special Defence Contribution) but still pay:
- Income tax → 0% up to €19,500 per year, progressive thereafter.
- General Health System (GHS) Contribution → 2.65% on passive income (interest, dividends) up to €4,770/year.
- Corporate tax → 12.5% standard rate, or 2.5% under the IP Box regime for qualifying businesses.
Do I need to open a company in Cyprus to qualify for Non-Dom status?
No, but many expatriates choose to open a company to establish tax residency and benefit from the 12.5% corporate tax rate or 2.5% IP Box tax rate for intellectual property businesses.
How long does it take to obtain Cyprus Non-Dom status?
The application process takes approximately 2 to 4 weeks once all documents are submitted. You will then receive your Cyprus Tax Residency Certificate confirming your status.
How can I apply for Cyprus Non-Dom tax residency?
To apply, you need:
- Proof of residence (rental contract or property deed).
- Valid passport.
- Tax registration forms.
- Employment contract or company ownership proof.
- Immigration “Yellow Slip” (if applicable).
