Get the Cyprus Tax Residency by staying in Cyprus only 60 days

Under the currently existing (to be revised) law individuals were considered as tax resident in Cyprus if they were physically present for at least 183 days per year.

The Income Tax Law has now been amended so that an individual, who (i) does not remain in any of their state for one or more periods which altogether exceed 183 days in the same tax year and (ii) who is not tax resident in any other state for the same tax year, be considered to be a tax resident of Cyprus, provided that all of the following conditions are cumulatively met:

1. He/she should remain in Cyprus for at least 60 days during the tax year;
2. He/she should pursue any business in Cyprus and/or to work in Cyprus and/or to be a director in a company tax resident in Cyprus at any time during the tax year;
3. He/she should maintain a permanent residence in Cyprus, which can be either owned or rented by him

It is clarified that an individual who cumulatively fulfils the above conditions is not considered as tax resident of Cyprus in the tax year, if in that year the exercise of any business and/or employment in Cyprus and/ or the holding of a post to a taxable person of Cyprus have ceased.

For calculating the days of presence in Cyprus:

• The day of arrival to Cyprus is considered as a day in Cyprus.
• The day of departure from Cyprus is considered as a day outside of Cyprus.
• The arrival in Cyprus and the departure from Cyprus on the same day is considered as one day in Cyprus.
• The departure from Cyprus and the return to Cyprus on the same day is considered as a day out of Cyprus.

Individuals who are Cyprus tax resident but are not domiciled in Cyprus will be exempt from special defence contribution which is levied on dividends, interest, and rental income.

The following tax incentives exist for individuals employed in Cyprus who were previously not tax residents:

• Lower of €8.550 or 20% of the remuneration from any office or employments exercised in Cyprus is exempt for a period of 5 years (this incentive will expire in 2020)
• For individuals with employment income exceeding €100.000 per annum, a 50% tax exemption exists which can be enjoyed for a period of 10 years.

Published on Tuesday 1st August 2017