Taxes in Cyprus
Non-domicile Tax Regime (Non-Dom Status)

Since 1992, Feod Group has been providing a wide range of corporate, immigration and legal services in Cyprus and other EU countries.
The company includes accredited lawyers

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✓ Cyprus tax resident status
✓ Tax planning and tax optimization
✓ Comparison of taxation by jurisdictions of interest (EU, US and UK)
✓ Corporate and personal taxes in Cyprus: income tax, capital gains, property taxes

If you are in Cyprus and you need our advice or support for your case, leave us a request or call the Feod Group office in Larnaca + 357 99 849 525 (WhatsApp)

In order to understand how much tax you need to pay in Cyprus, you need to understand the difference in tax resident status.

In other words, your tax residence status determines in which country you will pay taxes.

If you are a tax resident in Cyprus, you must file a declaration and pay taxes in Cyprus, both on your Cypriot income and on all foreign income.

Persons who are not tax residents are taxed in Cyprus only on their income from Cypriot sources.

Being a Cyprus tax resident offers many benefits, which is why many foreigners are interested in becoming Cyprus residents for tax purposes.

How to become a tax resident in Cyprus

You can become a Cyprus tax resident in one of the following ways:

⇒ 183 day rule

An individual is considered a tax resident in Cyprus if he spends at least 183 days in Cyprus in a tax year.

⇒ 60 day rule

Under the 60-day rule, an individual is considered a tax resident in Cyprus, provided that in the relevant tax year:
– Stays in Cyprus for at least 60 days
– The applicant must be doing business in Cyprus or be employed in Cyprus or be a director in a company registered in Cyprus at any time during the tax year.
– The applicant is permanently resident in Cyprus (either owned or rented).
– The applicant must not be a tax resident of any other country or stay in any other country for a period or periods exceeding 183 days in respect of any year in which Cyprus tax residency is requested.

The concept of a non-domiciled resident tax resident of Cyprus has been introduced into the legislation of Cyprus.

Non-domicile status is a special tax regime for persons residing in Cyprus for at least 60 days in each tax year, who have close personal ties with the country, but do not plan to make Cyprus their domicile (permanent residence).

According to the non-dom concept, foreigners who choose to relocate their personal tax residence to Cyprus will automatically enjoy tax benefits for the next 17 years after moving to Cyprus and becoming a tax resident.

Benefits of a Cyprus tax resident

✓ Full exemption from taxation in Cyprus of dividends and other passive income from interest paid, regardless of where such income is received, in Cyprus or worldwide;
✓ Full exemption from taxation on profits from the sale of securities, shares, bonds, debentures, etc., with the exception of profits from the value of shares of real estate in Cyprus;
✓ Your first €19,500 of general worldwide income is tax free in Cyprus.
✓ 50% income tax rebate for a period of 17 years for foreigners working in Cyprus with a salary of more than €55,000 per year.
✓ Capital gains tax on the sale of real estate located outside Cyprus is not levied;
✓ No inheritance tax, property tax, gift tax;
✓ In the case of persons who are beneficiaries of the Trust, such persons will be exempt from tax in Cyprus to the extent that income to / from the Trust will be in the form of interest or dividends.

In addition to the above tax benefits that are received by companies and individuals who are residents of Cyprus, the following tax rates also apply in Cyprus:

1. Basic taxes for companies in Cyprus

• Corporate tax in Cyprus. The corporate income tax rate for all companies is 12.5%.
• VAT
  – Standard VAT rate – 19%
  – Reduced rates – 9%, 5% and 0%
• Dividends, interest – 0% on dividend income, percent
• Employer contributions:
  – 8.3% of the employee’s salary to the Social Insurance Fund. A rate of 8.3% applies to both employer and employee until December 31, 2023 (the rate will increase every five years).
  – 2.9% – GESY (contributions to the general health system)
  – 2% and 0.5% for social cohesion and learning development funds.

2. Basic taxes for individuals in Cyprus

• Cyprus Personal Income Tax (Income Tax) for Cyprus tax resident individuals is levied on worldwide income. Individuals who are not tax residents of Cyprus are taxed only on certain types of income that is accrued or received from sources in Cyprus.
Income tax rates in Cyprus:
– up to 19 500 € – 0%
– 19 501 to 28 000 € – 20%
– 28,001 to 36,300 € – 25%
– 36,301 to 60,000 € – 30%
– 60 001 € and more – 35%

• Contributions to the Social Insurance Fund
Employees’ contribution to the state social insurance fund is 8.3% of the gross salary.

• Сapital gain
Applies only to income relating to immovable property located in Cyprus.
A rate of 20% is charged on income from the sale of immovable property located in Cyprus or from the sale of shares in companies owning immovable property located in Cyprus.
The first 17,086 € are tax free.
Capital gains tax on the sale of real estate located outside Cyprus – 0%

• Inheritance tax
There is no inheritance or succession tax here; your assets can pass to your heirs without them having to pay any local tax.

🔹 Tax advice in Cyprus. Comparison of taxation in different EU countries.
Effective international tax planning and tax optimization.
🔹 Opening a personal and corporate bank account in Cyprus
🔹 Obtaining a residence permit in Cyprus for financially independent foreigners, a residence permit in Cyprus when buying real estate, permanent residence in Cyprus for investments in business, real estate or funds, Business immigration to Cyprus.
🔹 Legal support during the registration of companies in Cyprus
🔹 Search for property for long-term rent or purchase of housing in Cyprus according to your request: apartments, villas, townhouses
🔹 Enrollment of children in schools, colleges and universities in Cyprus and EU countries

Article author

Anastasia Taran Head of Corporate Services
Ukraine

In 2013, she graduated in law from the National University «Odessa Law Academy» with honors and received a Master of Law degree. Anastasia Taran has experience in international and contract law, as well as corporate and tax law in Europe. Within the framework of Feod Group, she specializes i...

In 2013, she graduated in law from the National University «Odessa Law Academy» with honors and received a Master of Law degree. Anastasia Taran has experience in international and contract law, as well as corporate and tax law in Europe. Within the framework of Feod Group, she specializes in immigration and corporate law of European countries, particularly:

• family and corporate immigration solutions.
• establishing a business in Europe.
• personal and corporate taxation in Europe.
• opening accounts in European banks.
• obtaining a tax resident status.

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