Cyprus has become an increasingly attractive destination for internationally mobile individuals seeking tax residency. A lot of individuals have chosen Cyprus in recent years, for its favorable climate, EU membership, robust legal system, and tax incentives making it a strategic choice for entrepreneurs, professionals, and remote workers. But how exactly can someone become a tax resident in Cyprus?
The country offers two clear pathways to tax residency for individuals: the 183-day rule and the 60-day rule. Understanding how these work—and how to apply them in practice—is essential for proper planning and compliance.
What Is Cyprus Tax Residency?
An individual is considered tax resident in Cyprus if they meet either of the following two conditions within the same calendar year (January 1 – December 31):
The 183-Day Rule (Traditional Route)
This is the standard rule applied globally and is very straightforward:
The individual spends more than 183 days in Cyprus in a given tax year.
There is no additional requirement regarding employment, investment, or economic activity.
Individuals who meet this rule are considered Cyprus tax residents and are subject to Cyprus income tax on their worldwide income.
The 60-Day Rule (Flexible Residency Route)
Introduced in 2017, the 60-day rule is tailored for those who may not spend significant time in any one country but still wish to establish clear tax residency in Cyprus. To qualify, all of the following conditions must be met in the same tax year:
Stay in Cyprus for at least 60 days
Do not reside in any other country for more than 183 days
Are not considered tax resident in any other country
Conduct business, are employed, or hold an office (e.g., director) in a Cyprus tax-resident company
Maintain a permanent residence in Cyprus, either owned or rented, for personal use. You can combine this step with the Permanent Residency Programme (see bonus section below)
⚠️ Important: The employment or business relationship must not be terminated before 31 December of the same year.
How we structure this for some of our clients, is that they incorporate a Cyprus Company and they become Directors / Employees of this Company. Contact us for more information on how we can assist you set this up to meet the criteria.
How Days Are Counted
For both rules, days are calculated based on physical presence:
Arrival day in Cyprus: counts as a day in Cyprus
Departure day: counts as a day outside Cyprus
Same-day arrival and departure: counts as a day in Cyprus
Tax Residency Certificate
Once the conditions of either rule are met, individuals need to apply for a Tax Residency Certificate from the Cyprus Tax Department. This certificate is often used to prove residency status to foreign tax authorities, banks, and financial institutions. This is a process we undertake for our clients.
Why Choose Cyprus for Tax Residency?
Cyprus offers a range of tax advantages to resident individuals, particularly those who are classified as non-domiciled:
No tax on worldwide dividends and interest for non-doms
No wealth tax or inheritance tax
Attractive income tax exemptions for high earners and first-time residents
Access to over 60 double tax treaties
Practical Tips for Compliance
Keep accurate travel records (e.g., boarding passes, passport stamps etc)
Have clear employment contracts, appointment documents, or proof of business activity
Maintain a valid lease agreement or title deed for your Cyprus residence
Ensure you are not deemed a tax resident elsewhere under any other country’s laws
Bonus: Combine Tax Residency with Cyprus Permanent Residency by Investment
For individuals seeking both tax efficiency and a stable long-term presence in the EU, Cyprus offers an attractive combination: you can establish tax residency under the 60-day rule while also securing permanent residency through property investment.
By investing in Cyprus real estate, eligible individuals and their families can apply for Cyprus Permanent Residency under the fast-track programme, gaining the right to reside indefinitely in Cyprus and benefit from its EU-member status.
👉 Learn more about the Cyprus Permanent Residency by Investment Programme here.
This dual approach—residency for both tax and immigration purposes—is ideal for high-net-worth individuals, digital nomads, and internationally mobile professionals looking to simplify their lifestyle and global obligations in one strategic location.
Key Benefits of Being a Cyprus Tax Resident
Becoming a Cyprus tax resident—especially under the non-domiciled (non-dom) status—offers a wide range of personal tax advantages:
Income Tax Benefits
First €19,500 of annual income is tax-free
Progressive tax rates from 20% to a maximum of 35% above €60,000
New residents may qualify for a 50% income tax exemption on employment income exceeding €55,000 (valid for 17 years)
Non-Dom Status (Huge Tax Savings)
Individuals who are Cyprus tax residents but are non-domiciled in Cyprus enjoy exemptions on:
Dividends (100% tax-free – exemptions apply)
Interest income (100% tax-free)
Rental income: taxed only under income tax (no Special Defence Contribution)
⚠️ Non-dom status applies for 17 years from the date of first tax residency and is especially advantageous for foreign nationals.
Other Notable Benefits
No wealth tax
No inheritance tax
Access to Cyprus’s extensive network of double tax treaties
Right to apply for EU residence permits or Cyprus Permanent Residency
Ability to structure international income more efficiently
Cyprus is not just a tax-efficient jurisdiction—it’s also a secure, EU-based, business-friendly location with a high quality of life.
Conclusion
Whether you’re a digital nomad, business owner, or investor, Cyprus provides two flexible and transparent options for becoming tax resident. With professional guidance and proper documentation, you can enjoy low taxation, EU access, and long-term certainty—all from a Mediterranean base. Contact us at contact@asterisk.cy for more information on how we can assist you meet up the criteria and relocate to Cyprus.
Please note that the above is for information purposes only and does not constitute any form of advise. If you need advise please contact us or contact your professional advisor.
On 26 February 2025, the Economics Research Center of the University of Cyprus and the Tax Authorities presented a set of proposed amendments as part of a comprehensive tax reform plan. These proposals, which aim to modernize the Cypriot tax system while aligning it with European standards, are currently under review by the Ministry of Finance. Following this assessment, they will be submitted to the Council of Ministers and eventually to the House of Representatives for voting. As such, these measures are not yet finalized and may be subject to further modifications.
Key Proposed Changes
Personal Income Tax
Increase in Tax-Free Allowance: The tax-free annual income threshold is proposed to rise from €19,500 to €20,500.
Adjustments to Tax Brackets: The 35% tax rate will now apply to incomes exceeding €80,000, an increase from the previous threshold of €60,000.
New Deductions for Families and Individuals:
Additional tax-free allowance of €1,000 per dependent.
€1,500 tax-free allowance for parents purchasing their first home or paying rent.
€1,000 tax-free allowance for green household upgrades.
Single parents may benefit from double these allowances.
Corporate Income Tax
Increase in Corporate Tax Rate: The standard corporate tax rate is set to rise from 12.5% to 15%.
Abolition of Deemed Dividend Distribution Rules: The existing deemed dividend distribution mechanism is to be eliminated.
Reduction in Special Defence Contribution (SDC) on Dividends: The SDC rate applicable to dividends received by Cyprus-domiciled and tax-resident individuals will be reduced from 17% to 5%.
Stamp Duty and Other Adjustments
Stamp Duty Limitations: Stamp duty will only apply to agreements related to real estate transactions, banking, and insurance contracts.
Extended Tax Loss Carryforward: The period for carrying forward tax losses will increase from 5 years to 10 years, subject to conditions.
Green & Digital Investment Incentives: Companies investing in environmentally friendly initiatives or digital transformation may qualify for super deductions or accelerated depreciation, with no restrictions on carrying forward related tax losses.
Next Steps
As these are only proposals, they are still undergoing review. The Ministry of Finance will further assess their potential impact before submission to the Council of Ministers and, subsequently, the House of Representatives for approval. Some provisions may take effect as early as 2025, with full implementation expected by 2026.
What This Means for Businesses and Individuals
The proposed reforms reflect a shift towards a more competitive, equitable, and modern tax system. Businesses should assess how the changes might impact their tax liabilities and strategic planning. Individuals, especially those benefiting from the new personal tax deductions, should stay informed about how these reforms may affect their financial planning.
At Asterisk Corporate Services, we closely monitor legislative developments and are available to help businesses and individuals navigate these changes. If you have any questions about the potential implications of the proposed tax reforms, feel free to contact our team for further guidance. Please also note that the above is for reference only and does not constitute any form of tax advise.
Stay tuned for updates as the legislative process unfolds.
Relevant article in the local press can be found here.
The UK’s non-domicile (non-dom) tax regime has long been an attractive option for high-net-worth individuals seeking favorable tax treatment. However, with the recent announcement by the UK government that this regime will be abolished effective 6 April 2025, individuals currently benefiting from it or considering relocating are now searching for alternative solutions that meet their tax and financial planning needs.
The cancellation of the UK’s non-dom tax regime marks a significant shift in the global tax landscape, impacting thousands of non-domiciled residents who have relied on this system to minimize their tax obligations. This change is part of the government’s broader efforts to address economic and fiscal challenges and is expected to have substantial implications for high-net-worth individuals. For more details on the official announcement and its implications, visit UK Government Non-Dom Announcement.
Why Consider Cyprus for Your New Tax Residency?
Cyprus has emerged as a top destination for individuals (both EU and non-EU nationals) looking for an effective and efficient tax residency solution. The Cyprus non-dom tax regime offers significant benefits and provides an ideal environment for those needing a new base for both personal and business activities.
Key Features of the Cyprus Non-Dom Regime
Automatic Eligibility: Foreign individuals who become tax residents in Cyprus automatically qualify for the non-dom tax regime, which can be utilized for up to 17 years.
Flexible 60-Day Rule: Individuals can establish tax residency in Cyprus quickly through the convenient 60-day rule, providing a seamless transition for those needing to relocate their tax base promptly. More information on tax residency and 60-day rule requirements can be found here.
Tax Exemptions: Cyprus non-dom residents enjoy full exemption from taxation on dividends and interest, irrespective of the source and whether these funds are remitted to Cyprus or not.
Capital Gains: Complete tax exemption on profits from the sale of shares and qualifying securities, as well as on capital gains not related to immovable property in Cyprus.
No Inheritance Tax: Cyprus does not impose inheritance tax, offering peace of mind for estate planning.
Why High-Net-Worth Individuals Choose Cyprus
For individuals with substantial incomes derived from dividends, interest, and capital gains, the Cyprus tax regime is particularly beneficial. The island’s business-friendly environment also provides a competitive edge, featuring:
Low Corporate Tax Rates: Cyprus boasts one of the lowest corporate tax rates in the EU at 12.5%. You can read more about our tax system here.
Business Infrastructure: The well-established infrastructure supports the development of operational substance for companies.
Legal and Business Framework: The legal system is based on English common law, ensuring clarity and reliability for business operations.
Cost Advantage: A comparatively lower cost of establishing and maintaining business presence versus other prime EU jurisdictions.
Beyond Tax Benefits: A Balanced Lifestyle
Cyprus isn’t just about favorable tax rates. The island offers an excellent quality of life characterized by:
Ideal Geographical Location: Located at the crossroads of Europe, Asia, and Africa, Cyprus provides easy access to major markets.
Mediterranean Climate and Natural Beauty: The island is known for its warm weather, blue-flag beaches, and scenic landscapes.
Safety and Stability: Cyprus maintains a low crime rate, making it a secure environment for families.
Modern Infrastructure: High-quality housing, international schools, advanced healthcare, and a cosmopolitan lifestyle add to its appeal.
A Prime Business Hub
Cyprus offers more than just personal tax benefits; it’s a strategic hub for international business operations. Companies can benefit from:
Relocation Incentives: Provisions for businesses and key management to easily relocate to Cyprus.
Professional Services: A robust network of local service providers, including legal, financial, and administrative services, enhances ease of doing business.
How Asterisk Corporate Services Can Assist
Navigating a transition to Cyprus can be seamless with the right support. Asterisk Corporate Services offers comprehensive assistance with:
- Company Incorporation: Assistance in setting up and managing a Cyprus company, including redomiciliation services.
Immigration Processes: Guidance through all necessary immigration and residency requirements.
Tax Registration and Compliance: Ensuring tax registrations and ongoing personal income tax obligations are met.
Fiduciary Services: Establishing Cyprus International Trusts with professional trustee services.
Banking Solutions: Opening and managing local and international bank accounts.
Accounting and Bookkeeping: Full range of financial management services to ensure compliance and efficiency.
Conclusion
With the impending end of the UK non-dom tax regime, Cyprus presents an unmatched opportunity for high-net-worth individuals seeking a favorable tax environment coupled with an exceptional quality of life. Asterisk Corporate Services is here to guide you through every step of the process, ensuring a smooth transition and successful establishment in Cyprus.
For more details and tailored advice, contact us today at Asterisk Corporate Services and begin your journey to benefiting from the Cyprus non-dom regime.
For comprehensive solutions that align with your tax and business needs, visit asterisk.cy.
Information provided above is for information purposes and does not constitute any form of advise. For formal advise please contact us or any other tax professional.
Announcement: Extended Deadline for Income Tax Return Submission by taxpayers required to submit Summary Information Table of Controlled Transactions for the years 2022 and 2023.
The Tax Department announced that the Council of Ministers has approved an extension for the submission of Income Tax Returns for taxpayers required to submit a Summary Information Table of Controlled Transactions for the years 2022 and 2023.
New Deadlines
- Income Tax Return for 2022: Extended to 28 February 2025
- Income Tax Return for 2023: Extended to 30 November 2025
The relevant Decrees will be available on the Tax Department’s website shortly after their publication in the Official Gazette.
Relevant announcement here
As per the Assessment and Collection of Taxes Law, every Cyprus Tax resident company must file before 31 July 2024 a declaration of provisional tax assessment form to the tax authorities. This should indicate an estimate of the taxable profit for income tax purposes and the resulting tax liability for current tax year.
Companies that are not expected to have taxable profits in 2024, are not required to submit a Temporary Tax return and take any action on this email.
Payment deadlines
If the Company is expected to be profitable in 2024, provisional tax is payable in two equal instalments, 31st July 2024 (if paid by 31 August 2024 no penalties apply) and 31st December 2024 respectively.
Any final resulting tax for the year 2024 should be settled by 01 August 2025.
Interest & Penalties
Payment of the taxes after the due dates are subject to a 5% penalty which is actually imposed if payments are not made within a month of the due date (31st August 2024 and 31st January 2025).
The provisional tax assessment can be revised prior to payment of the 2nd instalment (31st December 2024) via submission of a revised form to the authorities. In the case of an upward estimation of tax payable, a 5% annual interest is payable (pro rata) on the difference between the revised amount payable and the amount initially declared for the 1st instalment.
Payments of less than 75% of the annual tax liability as provisional tax (cumulative in both instalments) will be subject to a 10% surcharge on the resulting tax liability.
As mentioned above, companies which are not expected to have taxable profits in 2024, are not required to submit a Temporary Tax return and pay any temporary tax to the tax authorities.
Contact us
Contact us at contact@asterisk.cy for any assistance you may need.
Disclaimer
The above is for reference and information purposes only and does not constitute any form of advise.
On 21 June 2024, The Tax Department announced that the deadline for the submission of the Individual Income Tax Return for the year 2023 and payment of the owed tax has been extended to 31 October 2024.
The obligation to submit an Individual Income Tax Declaration for the year 2023 applies to employees, pensioners, and self-employed individuals whose gross total Income for the year 2023 exceeds the amount of €19.500.
Cyprus Tax Authorities announced that the electronic Income Tax Return (form T.D.1) for employees, pensioners and self-employed individuals who do not prepare audited financial statements for the year 2023 is available for submission, via the TaxisNet system.
It is noted that, the obligation to submit an Income Tax Return for the year 2023, arises only when the annual gross income of natural persons exceeds the amount of €19.500.
The deadline for the submission of the Income Tax Return for individuals for the year 2023 and the payment of any tax due without interest and penalties is on 31 July 2024.
If you need assistance you can visit our colleagues at www.taxapp.cy who have developed a smart tool for the preparation and submission of the Income Tax Return.
For any queries feel free to contact us at contact@asterisk.cy.
As of February 1, 2024, the Commissioner of Tax announced adjustments to Cyprus Transfer Pricing Thresholds for 2022. Notably, the Finance category threshold increases to €5.000.000 and all others to €1.000.000. Circular 06/2023 remains applicable amidst ongoing legislative discussions.
Asterisk Corporate Services would like to inform you that from 1/1/2024 an increase in Social Insurance Contribution rates will come in effect.
According to the provisions of the Social Insurance Law of 2010, as of January 1st 2024 both employer and employee contributions on insurable earnings to the Social Insurance Fund will increase by 0,5%, from 8,3% applicable today to 8,8% each.
The below table summarizes the contribution rates which are applicable for the year 2024:
| Self-employed individuals | 16,6 % |
| Employee’s contribution | 8,8 % |
| Employer’s contribution | 8,8 % |
| Employer’s contribution to the Redundancy Fund | 1,2 % |
| Employer’s contribution to the Human Resource Development Authority Fund | 0,5 % |
| Employer’s contribution to the Social Cohesion Fund | 2 % |
The Maximum Limit of emoluments also increases as follows:
| Weekly | Monthly | Yearly | |
| € | € | € | |
| Weekly employees | 1.209 | 64.077 | |
| Monthly employees | 5.239 | 62.868 |
Do not hesitate to contact us for any questions you may have.
