Non-Domicile Tax Category “The Cyprus Special” – Corporation Tax


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A non-dom is a person who lives in a country but does not have the same domicile as that country. Once an individual is born in a particular country, they automatically become domiciled in that country, someone by changing their country of residence is not automatically a tax resident to have non-domicile status in Cyprus, there are several requirements.

Under the provisions of Cyprus tax laws, an individual who is a tax resident of Cyprus under the provisions of the Income Tax Act (either under 183

days rule or the 60 day rule) but is “not domiciled” in the Republic of Cyprus and will be exempt from the Special Defense Contribution (SDC).

The 183 day rule for tax residency in Cyprus applies to persons who reside 183 days in a calendar year in Cyprus. The 60-day rule for tax residency in Cyprus applies to persons who are not resident in any state for more than 183 days, are not considered tax residents of any state, are resident in Cyprus for at least 60 consecutive days and have other commitments. with Cyprus.

The Social Defense Contribution Law stipulates that dividends and interest earned by natural persons resident for tax and domiciled in Cyprus are subject to tax at the rate of 17% and 30% respectively, regardless of the flow of their income from Cyprus or abroad. The rent is also taxable at the rate of 3% on 75% of the gross amount. Non-domiciled individuals, meanwhile, will benefit from tax-free dividends, interest and rental income.

A person of Cypriot origin will also be treated as “domiciled in Cyprus” for the purposes of the SCD, except for:

  1. If you reside in a different country and have obtained domiciled tax status and were not a Cypriot tax resident for at least 20 consecutive years prior to the tax year in question

  2. A natural person who was not a Cypriot tax resident for a period of at least 20 consecutive years immediately before the entry into force of the provision introduced. (before 07/16/2015)

In general, an individual who remains tax resident in Cyprus for at least 17 years in the last 20 years preceding the tax year in question is considered domiciled for DDC purposes.

Benefits of non-domicile status

  • Tax benefits of Non-Dom status:

  • 100% tax-free dividends

  • 100% tax-free passive interest income

  • No special defense tax on rental income

  • Taxed on the basis of Cyprus corporation tax on their worldwide income

Conditions for Non-Domicile:

  1. Cyprus wants to attract wealthy people to come and reside in Cyprus, these people should not have lived in Cyprus for 17 out of the last 20 consecutive years

  2. They must prove that they have lived in Cyprus for more than 60 days and that they have not lived in any other country for more than 183 days.

  3. They must register in Cyprus as tax residents.

  4. They must have a physical presence in Cyprus, they must show a rental agreement or purchase a residential property.

The status provides an excellent tax planning optimization opportunity for foreigners who wish to increase their savings. The Cypriot program is a tax reform aimed at attracting more international investors and high net worth individuals.

Originally published on April 04, 2022

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.


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Dixcart Group Limited

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