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News & Knowledge

Cyprus: New “60 day” tax residency rule for individuals

4th September 2017

Robert Homem, Dixcart Management (Cyprus) Limited

In July 2017, the Cyprus Parliament voted for an amendment to the current criteria used to determine Cyprus tax residency. MSI's Cyprus member firm Dixcart Management (Cyprus) Limited provides an overview of the key changes.

The current “183 day rule” applies to individuals who have physically resided in Cyprus for more than 183 days during one calendar year. In addition to this, a second test will be implemented whereby an individual will be able to become Cyprus tax resident in 60 days. This rule will be applicable to individuals who do not spend more than 183 days in Cyprus or in any other jurisdiction. It is anticipated that this amendment will be effective retrospectively as from 1 January 2017 (the start of the Cyprus tax year).

Criteria to be Met for an Individual to be Considered Cyprus Tax Resident in 60 Days:

The “60 day rule” applies to individuals who in the relevant tax year:

  • reside in Cyprus for at least 60 days;
  • operate/run a business in Cyprus and/or are employed in Cyprus and/or are a director of a company which is tax resident in Cyprus. Individuals must also have a residential property in Cyprus which they own or rent;
  • are not tax resident in any other country;
  • do not reside in any other single country for a period exceeding 183 days in aggregate.

Days Spent In and Out of Cyprus

For the purpose of the rule, days “in” and “out” of Cyprus are defined as:

  • the day of departure from Cyprus counts as a day out of Cyprus;
  • the day of arrival in Cyprus counts as a day in Cyprus;
  • arrival in Cyprus and departure on the same day counts as a day in Cyprus;
  • departure from Cyprus followed by a return on the same day counts as a day out of Cyprus.

Cyprus Tax Rules

Cyprus tax rules also apply to tax resident non-domiciled individuals.

The key tax benefits are:

  • a zero rate of tax on interest
  • a zero rate of tax on dividends

Additional tax advantages are available to individuals fulfilling the tax residency criteria and  comprehensive details are available in Information Note 384: New Non-Domicile Regime – Making Cyprus Even More Attractive for Individuals.