Cyprus Non-Domicile Individuals
The non-domiciled tax status entitles to tax-free receipt of dividends. Do you qualify?
The Cyprus Non-Domiciled Tax Status
Become a non-dom tax resident of Cyprus by staying in Cyprus for at least 60 days per year, while not being tax resident of any other country.
The Cyprus Non-Dom Tax Status provides for exemption from tax on dividends and interest for a period of 17 years.
While many high-tax countries further increase their capital gain tax on dividends, and even extend tax liability to unrealised income, Cyprus provides tax exemption on income from dividends and interest received for a period of 17 years.
Income from the disposal of securities is not taxable in Cyprus.
An individual person enjoys the Cyprus Non-Domiciled Status if he or she is tax resident of Cyprus and has not been a tax resident of Cyprus as per the Income Tax Law for a period of 20 consecutive years prior to the introduction of the law (i.e. prior to 16 July 2015).
Benefits of the Cyprus Non-Dom Tax Status by the 60-Day Rule:
- No tax liability on income from dividends, from Cyprus or any other country;
- No tax liability on income from interest, from Cyprus or any other country.
The Cyprus Non-Dom Tax Status by the 60-Day Rule – Conditions
Any individual person can become a tax resident of Cyprus and can benefit from the Cyprus Non-Dom Tax Status by the 60-Day Rule if all the below conditions are complied with:
- The person has not been a tax resident of Cyprus as per the Income Tax Law for a period of 20 consecutive years prior to the introduction of the law (i.e. prior to 16 July 2015).
- The person stays at least 60 full days in Cyprus, during each calendar year. The days are counted in aggregation. For the exact definition of how the days are to be counted, please visit our respective page.
- The person must rent (or buy) a house or apartment in his or her name. In case of renting, the dwelling must be rented on a 12-month basis for each calendar year.
- The person must demonstrate “its economic interest in Cyprus”, as the law stipulates. Acceptable forms of demonstrating the economic interest in Cyprus are typically employment by a Cyprus company, or being significant shareholder a company in Cyprus and being appointed as the company’s director, or one of its directors.
- The person must be insured in Cyprus.
- The person must be registered as a resident of Cyprus with the Civil Registry and Migration Department.
- The person must not be tax resident of any other country.
- The person must not stay 183 days or more in any other country and must be ready to prove that on an annual basis.
Other Useful Information
- While the Cyprus Non-Dom Tax Status provides for exemption from tax on income from dividends and interest, all other types of income (e.g. salaries etc.) are subject to applicable tax.
- Dividends and interest received is subject 2.65% General Healthcare System Contributions (GESY, GHS), which is payable also by persons benefiting from the Cyprus Non-Dom Tax Status.
However, the income from dividends and interest subject to General Healthcare System Contributions is capped at €180.000 per year, resulting in a maximum annual amount of contribution of €4,770; i.e. annual dividends and interest received above the threshold is not subject to the contribution.
The threshold is decided on an annual basis. The threshold for 2022 was 2.65%, and it has been reconfirmed at the same level for 2023.
- As mentioned at the beginning of this article, income from the disposal of securities in its widest sense (shares, bonds, tradable contracts etc.) are not subject to tax in Cyprus. However, 2.65% General Healthcare System Contributions are to be paid.
- While EU citizens do not need any kind of permission to become a resident of Cyprus, Cyprus residency for non-EU citizens is subject to conditions. Please contact us if you wish advice on this matter.
The Cyprus Non-Domiciled Tax Status – Our Services
Shanda Consult is well experienced in providing advice and compliance services as well as implementation to corporate executives and other individuals who wish to become resident of Cyprus and benefit from the Cyprus Non-Domiciled Tax Status. Correctly planned, a qualifying non-dom individual that is resident of Cyprus for tax purposes will pay no tax on capital gains and most investment income. Contact us!