According to the recently incorporated conditions an individual is considered as Cyprus Tax Resident if the following requirements are cumulatively met:

• He/She remains in Cyprus for at least 60 days in the year of assessment.
• He/She carries out any business in Cyprus; and/or works in Cyprus and/or holds an office in a company which is tax resident in Cyprus during the tax year.
• He/She maintains a permanent residence in Cyprus (owned or rented).

The individual shall not be tax resident in any other country during the year of assessment and shall not stay in any other country for a period exceeding 183 days in total in the same tax year.

Outcome – Tax Benefits

• Dividend income, from foreign as well as local investments will not be subject to Special Defence Contribution (“SDC”; which is the “capital gain tax of Cyprus) in the amount of 17%.
• Dividend income is unconditionally exempt from Income Tax. Therefore, the tax payable by a non-domiciled Cyprus tax resident on dividend income will be zero.
• Interest: A non-domiciled tax resident earning interest income, from foreign as well as local sources, will not be subject to SDC in the amount of 30%. In addition, interest income is also exempt from Income Tax. Therefore, the tax payable by a Cyprus resident non-dom on interest income will be zero.
• Rental income: A non-domiciled tax resident earning rental income, from properties in Cyprus or abroad, will not be subject to SDC in the amount of 3%. Rental income will only be subject to Income Tax at the normal rates (following a 20% allowance).

Please do not hesitate to contact us for further clarifications and suggestions tailored to your personal needs.

Pantelis Vorkas