✓ Comparison of taxes across various EU jurisdictions
✓ Selection of the best tax regimes and benefits
Cyprus tax system
Do you want to reduce your tax burden, protect your assets, and utilize legal tax optimization mechanisms in Europe? Then Cyprus is your ideal choice!
Cyprus has one of the most attractive and competitive tax systems in the EU, combining low rates, transparent regulations, and international compliance. It is a legal and reliable jurisdiction for entrepreneurs, investors, and individuals seeking favorable taxation, international business opportunities, and asset protection.
At the same time, Cyprus is not an offshore jurisdiction but a low-tax jurisdiction fully compliant with EU, OECD, and international tax regulations. This means that by leveraging the country’s tax advantages, you won’t face legal risks or sanctions, as often happens in offshore zones.
Cyprus provides robust mechanisms to protect the rights and interests of tax residents, offering a stable legal system and transparency in tax regulation.
Advantages of Cyprus’s Tax System
✔One of the lowest tax burdens in Europe ✔ Flexible tax residency options (183 and 60-day rules) ✔ Tax exemptions on dividends, interest, capital gains, inheritance, and wealth ✔ Extensive network of double taxation treaties (65+ countries) ✔ Strong legal protection based on English law ✔ Compliance with EU, OECD, and FATF regulations – Cyprus is not an offshore jurisdiction
In 2025, Cyprus continues to strengthen its position as one of the best destinations for tax planning and international business, offering a stable economy, flexible tax regimes, and a high level of asset protection.
How to Obtain Cyprus Tax Residency
To take advantage of all tax benefits and minimize your tax burden, you need to obtain Cyprus tax residency status.
This status determines in which country you will pay taxes on your worldwide income and allows you to benefit from Cyprus’s favorable tax system, including a 0% tax on dividends and interest.
What is Cyprus Tax Residency?
A Cyprus tax resident is an individual or legal entity subject to taxation in Cyprus under the country’s legislation.
🔹 Tax Residency for Individuals Being a tax resident of Cyprus means filing tax returns and paying taxes in Cyprus on income earned worldwide. However, Cyprus tax residents can obtain Non-Dom status, allowing them to benefit from Cyprus’s extensive double taxation treaties with over 65 countries. This provides the following advantages:
✔ Avoid double taxation on income earned abroad; ✔ Optimize tax liabilities by utilizing favorable tax regimes; ✔ Offset foreign taxes paid against tax obligations in Cyprus.
🔹 Tax Residency for Legal Entities For companies, Cyprus tax residency is determined by the place of incorporation and effective management and control. This means that if the board of directors, key management decisions, and business operations are conducted from Cyprus, the company is considered a tax resident and is subject to corporate tax at a rate of 12.5%, one of the lowest in the EU.
Why is Cyprus Tax Residency Beneficial?
Obtaining Cyprus tax residency offers numerous advantages, making it one of the most attractive options:
Low Taxes Cyprus has a low corporate tax rate of 12.5%, 0% tax on dividends and interest for tax residents with Non-Dom status, and no inheritance tax or wealth tax. Additionally, the first €19,500 of annual income is tax-free, making Cyprus’s tax system both flexible and highly advantageous.
Non-Dom Status – Full Tax Exemption on Passive Income Individuals qualifying for the Non-Dom regimeare exempt from taxes on interest, dividends, and capital gains (except for gains from the sale of Cyprus real estate) for 17 years.
No Requirement for Controlled Foreign Company (CFC) Reporting If you become a Cyprus tax resident and obtain a Tax Residency Certificate, your company will no longer be classified as a Controlled Foreign Company (CFC) in your former tax jurisdiction. This allows international business owners to avoid complex CFC reporting obligations and use Cyprus as their primary tax jurisdiction for business and asset management.
Double Taxation Treaties This works as follows: if a Cyprus tax resident earns income from another country, taxes paid in the source country can be credited against Cyprus tax obligations or fully exempt. For dividends, interest, and capital gains, Cyprus offers 0% tax under the Non-Dom regime, making it a highly attractive jurisdiction for international entrepreneurs. Moreover, Cyprus’s double taxation agreements allow for reduced tax rates on specific income types, enhancing tax efficiency. To benefit from these agreements, a Tax Residency Certificate (TRC) is required—an official document confirming an individual’s Cyprus tax residency.
Flexible Tax Residency Rules (183 & 60 Days) Cyprus offers two tax residency schemes, making it beneficial for both those planning to live on the island long-term and those who spend limited time there but wish to benefit from Cyprus’s tax advantages.
Conclusion
Cyprus tax residency allows for legal tax minimization through flexible tax rates and international treaties. This makes Cyprus one of the best options for entrepreneurs, investors, and high-income professionals engaged in international business.
There are two main ways to obtain Cyprus tax residency: the “183-day rule” and the “60-day rule.” Depending on your lifestyle and tax goals, Cyprus offers flexible conditions, allowing you to choose the most suitable option—either standard residency by staying more than 183 days per year or an accelerated scheme in just 60 days.
1. The “183-Day Rule”
The traditional way to become a Cyprus tax resident is to reside in Cyprus for at least 183 days in a tax year and establish a center of life and interests. This option is suitable for those who physically live in the country and want to benefit from its tax advantages.
2. The “60-Day Rule” (Accelerated Scheme)
This option is ideal for individuals who do not reside in Cyprus full-time but still wish to obtain tax residency and enjoy its benefits. Under the “60-day Cyprus tax residency rule,” an individual can become a tax resident by spending only 60 days per year in Cyprus, provided they meet several additional requirements:
Stay in Cyprus for at least 60 days within the calendar year.
To apply for tax residency under the 60-day rule, the applicant must have a legal status allowing them to work in Cyprus. For instance, Ukrainian citizens may qualify under temporary protection status.
Be employed by a Cyprus-registered company—for example, as a director, receiving a salary and making social security contributions.
Maintain a personal bank account and a company bank account.
Have a permanent place of residence in Cyprus (either owned or rented property).
Not be a tax resident of another country and not spend more than 183 days per year in any other country.
Comparison of the 183-Day Rule and the 60-Day Rule
Criterion
“183-Day Rule”
“60-Day Rule”
Minimum Stay in Cyprus
183 days per year
60 days per year
Is Business or Employment Required?
No
Yes
Is Permanent Housing Required?
Yes
Yes, either property ownership or a rental agreement
Main Advantage
Suitable for those who live in Cyprus most of the year
Fast-track tax residency with minimal stay requirements
Both options allow you to take advantage of beneficial tax incentives and effectively optimize taxation in Cyprus according to your individual goals and financial needs.
Contact our specialists to learn more about the Cyprus tax residency process and choose the best option for you!
Individuals who are tax residents of Cyprus are required to pay tax on their worldwide income; however, the Cypriot tax system offers significant advantages:
Income tax is calculated on a progressive scale from 0% to 35%, with the first €19,500 of income exempt from taxation. Additionally, foreign professionals earning more than €55,000 per year can reduce their income tax by 50% for up to 17 years, making Cyprus an especially attractive jurisdiction for highly paid professionals.
No inheritance tax in Cyprus, and no wealth tax, unlike many other European countries where such levies can reach 10-30% of asset value.
Annual property tax has been abolished, making property ownership more affordable and reducing maintenance costs compared to other EU countries.
Employers in Cyprus pay minimal social contributions compared to most EU countries, making business operations more cost-effective. Employees also contribute small amounts to social and medical funds, reducing their overall tax burden.
One of the main reasons why many choose to register companies in Cyprus is the low corporate tax rates and incentives that allow for legal tax optimization.
Companies registered in Cyprus are subject to corporate tax at just 12.5%, one of the lowest rates in the EU.
Cyprus holding companies may be completely exempt from tax on dividends received from foreign subsidiaries if certain conditions are met.
No capital gains tax applies to the sale of shares, bonds, and other securities, making Cyprus an ideal jurisdiction for investment businesses.
Cyprus is also an attractive location for intellectual property (IP) companies, thanks to the IP BOX regime, which allows up to 80% of profits generated under the regime to be tax-free, with the remaining 20% taxed at just 12.5%.
Feod Group provides a full range of corporate, tax, and immigration services for individuals and businesses in Cyprus. We offer comprehensive legal support with the participation of Cypriot lawyers, accountants, and auditors.
✔ Company registration support – Business setup in Cyprus, accounting and tax compliance, assistance in opening bank accounts. ✔ Tax optimization – Development of personalized strategies to reduce tax burdens. ✔ Tax residency assistance – Registration with tax authorities, obtaining a tax identification number and Non-Dom status, support in acquiring a Cyprus Tax Residency Certificate. ✔ Investment and financial consulting – Analysis of investment opportunities, financial planning, and advisory services for investments in Cyprus. ✔ Immigration status processing – Legal support in obtaining residency permits, temporary protection status, and work permits.
Feod Group – your trusted partner in Cyprus! Contact us, and we will find the best solution for your business, tax planning, and immigration needs.
What are the benefits of Cyprus tax residency status?
Cyprus tax residency allows individuals to benefit from low tax rates, apply double taxation agreements, and enjoy exemptions on dividends, interest, and capital gains under the Non-Dom status.
How can I confirm my Cyprus tax residency?
To confirm Cyprus tax residency, you must obtain a Tax Residency Certificate from the Cyprus Tax Department by submitting an application along with documents proving compliance with tax residency requirements.
What is the Cyprus Tax Residency Certificate?
A Tax Residency Certificate is an official document confirming that an individual or legal entity is considered a tax resident of Cyprus for taxation purposes.
How can I obtain a Cyprus Tax Residency Certificate?
To obtain a Cyprus Tax Residency Certificate, you must:
Register with the Cyprus Tax Department and obtain a Cyprus Tax Identification Number.
Submit tax returns and documents proving the receipt of foreign dividends or interest.
Provide proof of residence in Cyprus (property ownership or a rental agreement).
Complete and submit an official application to the tax authorities.
Can I run a business abroad while being a Cyprus tax resident?
Yes. You can own a company or receive income from abroad while maintaining Cyprus tax residency.
Can I obtain Cyprus tax residency without living in the country?
Yes, under the “60-day rule”, you can become a Cyprus tax resident by spending at least 60 days in Cyprus per year and having economic ties with the country (such as owning a company or being employed).
Can a Cyprus-based company use the owner's tax residency to reduce taxes?
Yes, if the company owner is a Cyprus tax resident, it may help optimize taxation. However, it is important to consider the management and control requirements as well as international double taxation agreements.
In 2013, Anastasia Taran graduated with honors from the National University "Odessa Law Academy", earning a Master of Laws degree. She joined Feod Group in 2018 and has since gained extensive experience in international corporate, tax, and immigration law....
In 2013, Anastasia Taran graduated with honors from the National University "Odessa Law Academy", earning a Master of Laws degree. She joined Feod Group in 2018 and has since gained extensive experience in international corporate, tax, and immigration law.
Since 1992, Feod Group has been providing a wide range of legal, business and immigration services in Europe, the USA and other countries of the world.
The company has accredited western lawyers, experts in various fields of law and jurisdictions of the world.
Having offices in Europe and the USA, Feod Group provides rapid paperwork and maximum customer comfort.
We provide our clients with related services, such as relocation and adaptation abroad, organizing family relocation abroad, enrollment of children in schools and many other services.
