Our esteemed law firm specializes in offering legal expertise to those seeking non-domiciled (non-dom) status and tax residency in Cyprus. Our services encompass thorough guidance and support throughout every stage of the process, including initial consultations, application submission, and ongoing regulatory compliance.
Our experienced legal and tax experts provide a range of services tailored to meet individual needs, focusing on tax planning, asset structuring, and adherence to Cyprus’s legal framework. We are dedicated to ensuring our clients achieve their financial objectives and fully benefit from the non-dom status in Cyprus.
Cyprus Tax Residency
Tax residency in Cyprus is determined by several criteria, including the duration and purpose of stay, personal and economic ties to Cyprus, and the location of one’s primary interests. An individual may qualify as a tax resident in Cyprus under the following conditions:
- Physical Presence: Spending over 183 days in Cyprus within a tax year (January 1st – December 31st) establishes tax residency.
- The 60-Day Rule: If an individual spends more than 60 days in Cyprus, does not reside in any other country for over 183 days, and maintains personal and economic ties to Cyprus without being a tax resident elsewhere, they qualify as a Cyprus tax resident.
- Permanent Residency: Obtaining a permanent residency permit in Cyprus also leads to tax residency.
Once deemed a tax resident, individuals are subject to taxation on their global income, encompassing earnings from employment, self-employment, property, and investments. Cyprus offers a favorable tax regime, including low rates, substantial exemptions, and over 65 international tax treaties.
Non-Domiciled (Non-Dom) Tax Status
The non-dom status in Cyprus applies to tax residents who do not have their permanent domicile in Cyprus. This status offers numerous advantages, such as reduced tax rates and significant tax exemptions, enabling efficient tax structuring.
To qualify for non-dom status, an individual must demonstrate that their permanent domicile is outside Cyprus. This status exempts eligible individuals from taxes on dividend and interest income, both locally and internationally, and offers a special regime for rental income and capital gains tax (CGT).
Key Benefits of Non-Dom Status
- Dividend Income: Exempt from the 17% Special Defence Contribution Tax (SDC) and income tax.
- Interest Income: Exempt from the 30% SDC and income tax.
- Rental Income: Subject to income tax at normal rates with an 80% taxable basis, exempt from SDC.
- Capital Gains Tax (CGT): Generally exempt for non-doms, except for gains from immovable property in Cyprus or certain company shares.
Obtaining Non-Dom Status
Claiming non-dom status requires submitting a non-domicile declaration to Cyprus tax authorities with supporting evidence of a domicile outside Cyprus.
Special Defence Contribution Tax (SDC)
SDC is a tax levied on dividends, interest, and rental income, introduced in 1980. It applies to both individuals and companies, with varying rates depending on income type and residency status.
Cyprus Tax Rates for 2023
The progressive tax system in Cyprus for 2023 ranges from 0% for incomes up to €19,500 to 35% for incomes over €60,000. There are tax exemptions and deductions available, and the progressive nature means higher incomes are taxed at higher rates.
Our firm is committed to providing exceptional legal services to those seeking to leverage Cyprus’s advantageous tax system, ensuring compliance and maximization of benefits under the non-dom status.
