Cyprus Tax Residency
by Staying in Cyprus 60 Days per Year
As from July 2017, Cyprus Income Tax Law (N.119 (I)2017) has been amended and became effective as from 1 January 2017, allowing to an individual to acquire Cyprus tax residency by staying only 60 days in Cyprus, under certain conditions, . An individual who meets all the conditions listed below with respect to a given tax year will be deemed tax-resident in Cyprus.
All of the following criteria must be met by an applicant:
- He/she remains in Cyprus for at least 60 days for one or more periods during the tax (calendar) year; and
- He/she carries out any business in Cyprus; and/or works in Cyprus and/or holds an office in a company which is tax resident in Cyprus during the tax year; and
- He/she maintains a permanent residence in Cyprus (owned or rented); and
- He/she do not reside in any other single state for a period exceeding 183 days, and
- He/she is not tax resident in any other state.
- A person who satisfies these criteria can receive a tax residence certificate by submitting written application and supporting evidence documentation.
Main benefits for an individual that chooses to become Cyprus Tax Resident
Individuals who are Cyprus tax residents, whether under the “60 day rule” or under the “183 day rule” are taxed in Cyprus on their worldwide income, however certain exceptions apply, as follows:
- A Cyprus tax resident individual but non-domiciled in Cyprus is exempt in Cyprus from taxation on his/her worldwide dividend and ‘passive’ interest income (eg interest and rental income). Read more in our website ‘Cyprus Non-Domiciled Tax Status’.
- Profit from the sale of securities is exempt from tax in Cyprus. ‘Securities’ include, inter alia, shares in local or foreign companies, bonds, debentures, options etc, except in cases where the value of the shares derives from the value of immovable property in Cyprus.
- An individual who is going to be employed in Cyprus and his/her income will exceed 100.000, and, provided that he/she has not been a tax resident of Cyprus prior to the commencement of his/her employment in Cyprus, he/she will enjoy 50% discount on his/her income tax in Cyprus, for a period of 10 years.
- Income from employment carried out outside Cyprus is exempted from Cyprus income tax, provided that the employment exercised outside Cyprus exceeds 90 days per tax year.
Calculation of the days of residency in Cyprus
- The day of departure from Cyprus is considered as a day outside of Cyprus;
- The day of arrival in Cyprus is considered as a day in Cyprus;
- Arrival in Cyprus and departure from Cyprus within the same day is considered as one day in Cyprus;
- Departure from Cyprus and return to Cyprus within the same day is considered as one day outside of Cyprus.