Cyprus Tax residency for individuals – an overview

Introduction

This article provides a brief overview of Cyprus tax residency in relation to individuals, the implications of such a status and some of the practical considerations.

Cyprus tax residence – the general rule

Firstly, an individual who is present in Cyprus for 183 days will be resident for tax purposes in Cyprus.

Cyprus tax residence – ‘the 60-day rule’

In addition, one will also be resident for tax purposes in Cyprus under the so-called 60 day rules where each of the following is satisfied:

• You remain in Cyprus for one or more periods totalling a minimum of 60 days;
• You are not present in any other state for a total of over 183 days;
• You are not resident for tax purpose in any other state for the same tax year;
• You have some relevant activity in Cyprus, specifically that:
  • You operate a business in Cyprus;
  • are employed in Cyprus; or
  • hold a position in a company that is tax resident in Cyprus; and
• You maintain a permanent residence in Cyprus (either owned or rented).

Tax residency and Cyprus personal taxes

Cyprus personal income tax is imposed on the worldwide income of individuals that are  resident for tax purposes in Cyprus.

However, income from dividends and (most types of) interest income that is received by individuals are exempt from personal income tax

From 16 July 2015, individuals are subject to Special Defence Contribution on dividends and interest income where the person is both both Cyprus tax resident and Cyprus domiciled.

Capital gains are also not usually taxable in Cyprus unless they have arisen in respect of Cyprus situs immovable property

Individuals who are not tax residents of Cyprus are taxed only on certain types of income accrued or derived from sources in Cyprus.

Cyprus tax residency – practical considerations

In order to obtain a certificate of tax residence, all supporting documents must be submitted to the Tax Department of Cyprus. These docs must be stamped.

If the documents are in any other language than English or Greek then they must be translated.

If an individual is considering relocating to Cyprus, expert advice should be taken with respect to Cypriot as well as cross-border tax implications arising from the relocation.

If you have any queries about this article, tax residency in Cyprus, or tax matters more generally, then please do not hesitate to get in touch.

The content of this article is provided for educational and information purposes only. It is not intended, and should not be construed, as tax or legal advice. We recommend you seek formal tax and legal advice before taking, or refraining from, any action based on the contents of this article