Cyprus tax residency and non-domiciled rules

A tax resident in Cyprus is an individual who either spends at least 183 days in the country each year or meets the criteria established by the “60-day rule.” The relevant regulation is the Income Tax Law of 2002, and the amendments to the Cyprus tax law made on 14 July 2017.

The “60-day rule” applies to internationally mobile individuals who have genuine economic ties to Cyprus but do not spend 183 days there.

How to become a Cyprus tax resident under the 60-day rule?

To become a Cyprus tax resident under the “60-day rule” in 2026, the individual must meet all of the following conditions:

• Remain in Cyprus for at least 60 days during the tax year in question; and
• Not reside in any other single state for a period exceeding 183 days; and
• Carry out business activities in Cyprus and/or work in Cyprus and/or be a director in a company that is tax resident in Cyprus at any time of the tax year in question; and
• Maintain a permanent residence in Cyprus.

What are the applicable tax benefits?

Benefits for tax residents of Cyprus include, among others:

• No income tax on dividends
• No income tax on interest
• No wealth tax
• No inheritance tax
• No gift tax

More details are below.

Individuals who are Cyprus tax residents, whether under the “60-day rule” or the “183-day rule”, are taxed in Cyprus on their worldwide income, but certain exceptions apply, as follows:

• A Cyprus tax-resident individual who is not domiciled in Cyprus is exempt from taxation on his/her worldwide dividend and ‘passive’ interest income. An individual who does not have a “Domicile of Origin” in Cyprus is only considered to be domiciled in Cyprus for tax purposes when the individual has been a tax resident of Cyprus for a period of at least 17 years out of the last 20 years before the tax year in question.
• Profit from the sale of securities is exempt from tax in Cyprus. ‘Securities’ include, among other things, 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 employed in Cyprus and whose annual remuneration exceeds €55,000 will enjoy a 50% exemption on their income tax in Cyprus for a period of 17 years, provided they were not a tax resident of Cyprus for at least 15 consecutive years prior to commencing their employment.
• Income from employment carried out outside Cyprus is exempt from Cyprus income tax, provided that the employment exceeds 90 days per tax year.

Who is domiciled in Cyprus?

A person is domiciled in Cyprus by domicile of origin and choice.

Domicile of origin is the domicile a person acquires at birth.

Domicile of choice means acquiring a residence in the Republic by choice (a person’s actions and initiative). The residence has to be permanent and indefinite. The relevant law is the Wills and Succession Law, sections 6-11.

While the Wills and Succession Law provides the general legal definition of domicile, for the specific purpose of determining liability for the Special Contribution for the Defence (SDC), an individual is automatically deemed to be domiciled in Cyprus if they have been a tax resident for at least 17 of the last 20 years before the tax year in question.

The relevant legislation is the Special Contribution for the Defence of the Republic Law (Law 117 (I)/ 2002, as amended).

What is a non-dom in Cyprus?

A Cyprus non-dom is a tax resident who is not considered domiciled under local law, meaning they do not have a domicile of origin or choice in Cyprus, or have not lived in Cyprus for the last 17 out of 20 years before the tax year.

Non-domicile status provides exemption from the SDC on worldwide dividend and passive interest income.

Benefits of non-domiciled tax residents of Cyprus

In brief, non-domiciled tax residents of Cyprus are entitled to:

• The tax benefits available to all tax residents of the Republic, and
• Exemption from paying the SDC.

Here is the table with all non-dom status tax benefits:

Special Contribution for the Defence (SDC)	Exempted
Interest	Exempted
Dividends	Exempted
Income	Taxed on a scale, the first €22,000 are not taxed
Capital Gains	Taxed at 20% with allowances
Pension	Taxed (a special regime* applies; because of double-taxation treaties, you will not be taxed twice if your country has an agreement with Cyprus).

The SDC

The SDC aims to boost the Republic's defence capability. The relevant legislation is the Special Contribution for the Defence of the Republic Law (Law 117 (I)/ 2002, as amended).

Non-domiciled tax residents of the Republic are exempt from the SDC. To pay the SDC, individuals must be domiciled tax residents of the Republic.

Domiciled tax residents pay the SDC as follows:

• The applicable rate on dividends is determined by the year in which the distributed corporate profits were generated.
  • 5% for dividends distributed from company profits generated from 1 January 2026 onwards.
  • 17% for dividends distributed from company profits generated up to 31 December 2025 (this transitional rate applies to distributions made until 31 December 2031).
• 17% on standard interest.
• 3% on interest from government and corporate bonds.

Interest on compensation for disability or grievous bodily harm is exempted.

A person whose total annual income, including interest, does not exceed €12,000 may claim a refund on the SDC on interest. Contributions over 3% will be returned.

Read more about the Cyprus tax system.

Non-domiciled tax residents’ obligations

Non-domiciled tax residents of Cyprus still have to pay tax on:

• Income (with the abovementioned exceptions).
• Capital gains (gains from selling property like land, buildings and shares) with some general allowances under the Capital Gains Tax Law of 1980.
• The relevant municipality taxes for the area in which they live.
• Tax for the General Health System.