Cyprus Tax Residency

at 60 Days

Cyprus has introduced new legislation that offers the possibility of zero tax environment for non domicile tax residents who live in Cyprus only 60 days per calendar year, as analysed below.

An amendment to the definition of “Cyprus tax resident individual” as included in the Income Tax Law 118 (I)/2002, was recently voted by the Cyprus Parliament. The amendment is effective from 1 January 2017 and provides for an individual to be considered as a Cyprus tax resident under the 60 days scheme under specific conditions.

More specifically, the details of the amendment are as follows:

 

An individual will be considered as a Cyprus tax resident if he/she:

  • does not spend more than a total of 183 days in any country within a tax year; and

  • is not a tax resident of another country within the same tax year

and satisfies the following three conditions:

(a) remains in Cyprus for at least 60 days (not necessary continually) during the tax year;

(b) carries on a business in Cyprus (as director itself, not nominee director can be appointed) or is employed in Cyprus or holds an office in a Cyprus tax resident company at any time during the tax year; and

(c) maintains a permanent residence in Cyprus (owned or rented).

All of the above conditions need to be satisfied in order for the individual to be considered as a Cyprus tax resident.

 

It is noted that in case an individual is a tax resident in the Republic, tax is imposed on income accruing or arising from sources all over the world (both within and outside the Republic).

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