Cyprus enjoys popularity among digital nomads looking to relocate to a tax-exempted paradise due to its attractive expats and nomads taxes. Expats and nomads have the luxury of designing their lifestyles and setting up their workstations, facing the most breathtaking views. Cyprus offers an abundance of picturesque landscapes, modern amenities, and lucrative tax exemptions.
Cyprus attracts expats and nomads with a combination of natural beauty, geographic advantages, modern infrastructure, favorable taxation regime, expat-friendly immigration laws, and gastronomic Cypriot cuisine!
Keep reading to learn more about the expats and nomads taxes and what they enjoy in Cyprus.
One of the Most Favorable Tax Regimes in the European Union
Cyprus attracts expats and nomads with its taxation laws, ranking amongst the most favorable tax regimes across the European Union (EU). However, to enjoy these tax exemptions, you must become a part of the system, i.e., a tax-paying resident of Cyprus. Luckily, becoming a Cypriot resident is relatively straightforward.
You need to spend over 183 days on the island each year and at least 60 days before your application, with a permanent home and an established business in Cyprus.
Non-Dom Taxation Policy
The Non-Dom Tax policy makes the Cyprus taxation scheme undeniably attractive and favorable for expats and nomads who live everywhere and travel the world while reserving Cyprus as their home base. The most appealing aspect of this regime is the ability to become a tax resident of Cypriot within 60 days or 183 days.
The Non-Dom taxation regime is one of the most attractive expats and nomads taxes systems in the European Union, and you can process your application quickly.
Here are the two eligibility criteria:
- Spend over 183 days in Cyprus every year, and you are automatically eligible
- Spend at least 60 days on the island without paying taxes to another government. Maintain a permanent residence in Cyprus, which could be owned or rented. Set up your own business in Cyprus or employ the local talent.
Expats and nomads who qualify under this regime enjoy the lowest corporate income tax rate in the European Union, filed at 12.5%. The tax-free threshold of €19,500 also attracts expats and remotely working professionals levied on income taxation.
Learn more: Cyprus Non-Dom Expats and Nomads
Expats and Nomads Taxes: Corporate Taxation Regime
Investors, business owners, expats, and digital nomads flock to the island to benefit from Cyprus’ beneficial corporate taxation regime. The Cypriot government introduced this regime to attract foreign investors and expats, working sublimely. Cyprus charges foreigners 12.5% corporate tax, alongside low-income taxes. These exemptions allow foreigners to generate wealth by reducing their monthly and annual deductions. This benefit is another advantage regarding expats and nomads taxes in Cyprus.
However, expats need to be established tax residents to enjoy these benefits. All the income you earn globally will come under the Cypriot taxation regime.
Advantages of the Cypriot Taxation System
Cyprus’ progressive and business-friendly taxation regime offers numerous advantages to digital nomads, skilled professionals, entrepreneurs, investors, and corporate expats.
- Progressive tax varies, depending on your income, as it increases while your income increases and decreases if you’re earning less.
- Under Cypriot law, several forms of income are not subject to taxation. Expats and digital nomads can enjoy tax exemptions on their interest income, dividend income, and the profits they earn by selling securities.
- Individuals can benefit from multiple tax deductions on their income and savings. These include the financial losses they suffered during the fiscal year, their losses during the last five years, social insurance, and life premium insurance. Tax deductions are also offered on the individual’s medical fund and their donations to charities approved by the Cypriot government.
Expats and nomads who are non-domiciled citizens living in Cyprus can enjoy these tax exemptions and expand their wealth in a healthy economic climate. Cyprus is a splendid base for expats and digital nomads to invest and store their wealth and prevent hefty tax deductions from reducing their net worth.
Why is Cyprus perfect for expats and nomads? That’s because Cypriot law is the only legal system that captures the free-spirited essence of a digital nomad’s lifestyle. For instance, the country allows you to enjoy all the legal, financial, and economic advantages while traveling and exploring the world for over ten months each year.
Cypriots are a welcoming and hospitable bunch of kind people who allow expats and foreigners to find solace in their close-knit community. In Cyprus, enjoyment is the richest culture; everyone believes in living their life to enjoy all its pleasures.
The people believe in working to live rather than living to work merely. Most business activities are conducted over a chilled cup of iced coffee or a decadent platter. The attractive expats and nomads taxes regime is one of the numerous compelling aspects that make Cyprus an ideal ecosystem to improve your financial stability, life quality, and wellbeing.