Cyprus tax residency & non-dom: the 60-day rule explained

Two ways to be a Cyprus tax resident

The 183-day rule. Spend more than 183 days in Cyprus in a calendar year and you are tax resident — the classic test.

The 60-day rule (since 2017). You can be Cyprus tax resident by spending only 60 days in Cyprus in the year, provided that in the same year you:

1. 1do not spend more than 183 days in any other single state;
2. 2are not tax resident in any other state;
3. 3carry on business in Cyprus, are employed in Cyprus, or hold a directorship in a Cyprus tax-resident company; and
4. 4maintain a permanent home in Cyprus (owned or rented).

If the business/employment/office ends during the year, the benefit can be lost — so continuity matters.

Non-domicile status: the real prize

Cyprus levies Special Defence Contribution (SDC) on dividends, interest and rental income — but only on individuals who are domiciled in Cyprus. If you are a Cyprus tax resident but non-domiciled, you are exempt from SDC on:

• dividends (otherwise 17% SDC),
• interest (otherwise 17% SDC),
• rental income (otherwise 3% SDC on 75% of the rent).

For an entrepreneur living off dividends, this can mean zero Cyprus tax on that dividend income.

How long does non-dom last?

The exemption applies for up to 17 years out of any 20. After that, or if you acquire a Cyprus domicile of choice, SDC can apply.

What is still taxed

• Employment and business income is taxed under personal income tax, with a tax-free band and progressive rates (the first slice is tax free; top rate currently 35%).
• General Healthcare System (GeSY) contributions apply to most income types, with a cap.
• Note that non-dom does not remove GeSY — budget for it.

The relocation checklist

1. 1Confirm you can break tax residence in your current country (this is often the hard part — get home-country advice too).
2. 2Establish a permanent home in Cyprus.
3. 3Put the 60-day ties in place (company, directorship or employment).
4. 4Apply for a tax identification number and register as non-dom.

Relocating? Pair a tax lawyer with an immigration specialist to handle residency and permits together.