Cyprus offers numerous tax advantages to its citizens, with provisions extending benefits to foreigners and expats looking to make Cyprus their home. The Cyprus Non-Domiciled Status Program is another promising initiative that allows residents to benefit from financial security and economic wellbeing.
Individuals can benefit from this program if they are tax residents of Cyprus and have not been tax-paying citizens for 20 consecutive years before July 2015, when this law was first introduced.
Keep reading to learn about the Cyprus Non-Domiciled Status Program in detail.
Who is Eligible for Cyprus Non-Dom?
Individuals are classified as tax-paying residents of Cyprus if they have been physically present in the country for over 183 days of a calendar year. The 60-day rule also applies if the individual has maintained a permanent primary residence, owned or rented, and has not lived in any other country for longer than 183 days. Individuals can either reside in a property they own or one they have rented in any location across Cyprus.
The Cyprus Non-Domiciled Tax Status is granted to individuals who have not been tax residents of Cyprus for the past two decades. This Tax Status is validated by the Cyprus taxation authorities annually, and applications must submit relevant forms to be considered for this program. Calculate your time in Cyprus to ensure your eligibility before submitting your application.
Tax Benefits & Exemptions
hefty tax deductions. The most appealing benefit of this tax status program is the exemption individuals enjoy from capital gains tax on the income they earn from interest and dividends.
Cyprus yields enormous attraction in the international market for its tax exemptions, hailed as the most promising low tax jurisdiction across the European Union. Foreign investors and high-profile entrepreneurs choose Cyprus as their primary tax residence to enjoy the exemptions provided under the Non-Domiciled Tax Status. Companies and individuals with high net worth choose Cyprus as the base of their corporate operations, enjoying easy access to European markets and superior life quality to relocate their families.
Let’s take a closer look at the benefits:
- The dividend income of the individual, earned through local and foreign investments, will not be subject to capital gains tax.
- The individual’s interest income will not be subject to tax earned through local and foreign investments. Moreover, the interest income will not be subject to income tax, and residents filing under the Non-Domiciled Tax Status will pay zero interest income tax.
- Individuals earning a rental income from properties situated in Cyprus or elsewhere will only be subject to normalized income tax rates of:
- Up to €19,500 → 0%
- €19,500 to €28,000 → 20%
- €28,000 to €36,300 → 25%
- €36,300 to €60,000 → 30%
- Over €60,000 → 35%
Read More: Cyprus Tax System: A Detailed Guide For 2021
Who Can Apply for the Cyprus Non-Domiciled Tax Residency?
The requirements and procedures are relatively flexible as the Cypriot government wants to attract investors, entrepreneurs, and families looking to secure tax exemptions on their wealth and capital gains. Any Cypriot national can apply for this program under the revised 60-day rule or 183-day rule. The tax exemptions are valid for the individual’s worldwide income and wealth, as long as Cyprus remains their country of permanent residence.
This program is a commendable effort from the government to simplify and enhance the country’s taxation legislation and make the Cypriot economy a highly facilitative and compliant jurisdiction for high-profile investors and foreign entrepreneurs to thrive.
All investors, entrepreneurs, and property owners looking to secure tax exemptions are encouraged to apply to elevate their financial health and achieve their wealth-generation ambitions. This tax exemption program greatly transforms Cyprus into an attractive economy and an investor-friendly tax jurisdiction.